At today’s meeting, ECB decided to slow its PEPP bond purchases to a ‘moderately lower pace of net asset purchases under the pandemic emergency purchase programme (PEPP) than in the previous two quarters.’ This slowdown was widely expected and probably as close to the market consensus as there could be. The entire press conference unfolded in a quite predictable fashion.
The ECB gave further guidance of the next re-calibration to take place at the December meeting, which was widely as expected. The ‘calibrate, not taper’ narrative gave us deja-vu of the December 2016 press conference. Further TLTRO operations will be discussed alongside the general stance at the December meeting, but will be data dependent.
EUR/USD was largely unchanged on the day, with Bund yields slightly lower and intra-euro area spreads tighter.