Here’s how the markets reacted to the ECB

4 February 20222 years ago babelfish

After the move by the ECB, the markets reacted rather volatile. Rates have risen on almost all maturities and the euro has strengthened. The comment of Roberto Rossignoli, Portfolio Manager Moneyfarm

Today's meeting of the ECB has reserved few surprises on the interest rate side.

No movement for now and little intention of raising rates in the near future.

According to Lagarde 's point of view, for now there are no conditions for inflation to be stable at 2%, nor for a labor market that is solid enough to justify a rise in interest rates.

Although he obviously confirmed that inflation is at the heart of the directorate's concerns. And this was, perhaps, perceived as more Hawkish than in December.

But it was the stock purchase program that traders were most focused on. Indeed, as March approaches, as agreed, the PEPP will be discontinued, but until now we had few clues as to what would replace it.

We now know that the “traditional” securities purchase program (not contingent on the pandemic) will be increased by 40 billion in the second, 30 in the third and 20 in the fourth quarter, partially offsetting the elimination of the pandemic plan.

Markets reacted rather volatile. Rates have risen on almost all maturities and the euro has strengthened.

There is a belief among traders that the ECB will not actually be able to wait a year to move and will therefore have to do so in advance. Also in light of what the Bank of England has done today.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mercati-bce/ on Thu, 03 Feb 2022 15:47:49 +0000.