what are you expecting? Focus on PEPP purchases

The European Central Bank meeting in the program Thursday, April 22 It arouses interest, especially in relation to the program PEPP.

Eurotower decided at its last meeting to make bond purchases inMuch higherAs part of the epidemiological emergency program from 1.85 trillion euros To avoid unwanted tightening of financing terms.

So far, no indications have been given for this. While no surprises are expected at this week’s meeting, there may be clarity on how much debt to buy.

Not only that, policymakers are in European Central Bank They must decide whether they are doing enough to preserve the economy still hampered by the blockade, while those of the US, China and the UK are re-opening up and recovering.

So what to expect from European Central Bank meeting Thursday April 22?

European Central Bank meeting: Will PEPP purchases change? Forecasting

Over the past week, surveys have shown that the European Central Bank has bought 16.29 billion euros net as part of the PEPP.

In total, purchases amount to 976.585 billion euros Compared to the available availability, the equivalent of 1,850 billion euros.

Some economists say the European Central Bank can Increase purchases. This appears to be the main topic of Thursday’s meeting. Will there be any clarifications?

Meanwhile, the pace has already grown. Average weekly PEPP purchases 14.4 billion euros In the first eight weeks of 2021 and 16.9 billion euros in the four weeks following the March meeting.

The pace is disappointing, according to some bond analysts, while the minutes of the March meeting indicated splits within the central bank over the issue of support.

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Policymakers discussed a slight increase in purchases and then agreed to pre-purchase debt for the quarter, provided it is reduced later.

Head of the Dutch Central Bank Knot knot Acceleration is believed to be temporary. Vice President of the European Central Bank Lewis By Guindos He claimed that the ECB would act if it increased in Loan costs Unjustified, adding that removing the stimulus too soon was a greater risk than acting too late. Same conviction as Christine Lagarde.

Internal divisions over pace of bond purchases, extended freezes and potential delays Recovery fund Thus it forms the background for the European Central Bank meeting on April 22nd.

The sovereign bond markets may have calmed down from the heavy selling in February, but at the same time they want more clarity Motivation plans Once the economic recovery has taken hold.

European Central Bank: What are the economic outlook?

Unchanged interest rates and no decision-making surprises: From this perspective, what will the ECB say Economic outlook?

It will likely take until June for estimates to be updated. Meanwhile, since the March meeting, it loves the major economies France e Germany They extended the blockade to fight the third wave, delaying prospects for recovery.

The German economy is expected to contract in the first quarter, and expectations that the restrictions will extend beyond mid-April have dampened hopes for a quick recovery in the largest economy in the euro zone.

However, the Vaccinations On the increase, Eurozone activity returned to growth in March International Monetary Fund It just updated its growth forecast for Euro 2021 in 4,4% Than 4.2%.

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Lagarde It could maintain a balanced tone, as markets may take any bullish comment as an indication that Frequency of purchase Of bonds will slow down.

In the foreground Economic inflation, In March, the Eurozone showed + 1.3%. It is possible that Lagarde would repeat the idea that an A jump in prices It is driven by transient factors and fundamental trends remain weak. Therefore, the central bank must keep one Stimulus violent.

at The European Central Bank meeting on Thursday, April 22nd The words of the press conference will be heard carefully: the focus will once again be on strategy Persuade. what are you expecting?

Thelma Binder

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