MUFG over ECB: Herbeleggen tot eind 2022 creëert nog meer vrijheid

MUFG over ECB: Herbeleggen tot eind 2022 creëert nog meer vrijheid

4 juni 2020

ECB
ECB (2).jpg

Macro-econoom Henry Cook van MUFG reageert op de verdere versoepeling van het ECB-beleid.

'The ECB has expanded the PEPP by 600bn EUR to a total of 1350bn EUR. This is more than had been expected by us and the market (+500bn). Alongside the large and well-targeted fiscal stimulus package announced yesterday in Germany it is hard to argue that policymakers are behind the curve. The ultra-accommodative policy mix will increase the chances of a reasonable economic rebound as lockdown measures. Risks to our current forecast for euro area growth in 2020 (-8%) remain tilted to the downside but may now be slightly more balanced.

On the details, the expansion to the PEPP will allow the ECB to continue weekly purchases at a similar pace until early 2021. However, we suspect the ECB will be keen to make full use of the additional flexibility it has with PEPP purchases versus its standard asset purchase programme. Weekly purchases under the PEPP could be stepped up if there are signs of financial fragmentation. The other element of the announcement – that assets purchased under the PEPP will be reinvested until at least the end of 2022 – will give the ECB even more freedom to initially deviate from the capital key if there is an intention to correct any imbalances during the reinvestment phase.

Lastly, we note that the extension to at least 2021 and the announcement on reinvestment horizon suggests that the emergency programme may be less temporary than its title suggested.

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