Columbia Threadneedle: ECB meeting

Columbia Threadneedle: ECB meeting

March 12, 2021

ECB
Europa.jpg

Please find below a reaction comment on today’s ECB meeting from Adrian Hilton, Head of global rates and emerging market debt at Columbia Threadneedle Investments.

While the Fed and the Bank of England have shown comfort with the reflationary re-pricing of bond markets since the start of the year, the ECB has distinguished itself by attempting to talk down the rise in longer dated yields.  With today’s decision to boost its bond purchases over the coming quarter, the bank has shown a willingness to put its (printed) money where its mouth is.

Chairing the Governing Council must be like herding cats, and Christine Lagarde’s appearance at the post-meeting press conference left the distinct impression that the consensus she achieved is a fragile one.  By increasing the buying pace but maintaining the overall size of the PEPP envelope, and by committing to “maintain” rather than “deliver” favourable financing conditions (despite her verbal slip suggesting the reverse), the decision reveals a degree of discord that may complicate future communication.

Related posts