Amundi: Positive reading of the PEPP size increase by ECB

Amundi: Positive reading of the PEPP size increase by ECB

ECB
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Monica Defend, Head of Global Research at Amundi, comments on today's ECB decision.

'As expected, the governing council delivered very bad growth GDP  expectations along with subdued inflation prints.

 

We have a positive reading of the PEPP size increase and time extension. The first one was need according to our funding needs calculation, the second is going even beyond our expectations into 2022. It tempers market anxiety of tapering a V shaped recovery. The ECB announcement comes together with the German fiscal policy measures and the recovery fund proposal.

 

All in all commitment and political capital in the EU are impressive. We welcome preemptive and reactive measures to help and support economic fundamentals at a time were financial markets likely went too far and this justifies today’s consolidation at the margin  on the equity side. All in all these are all positive news and should support EU asset classes in the short term.'