ECB de Guindos Not Very Convincing on the Next Stimulus Package
The ECB is getting ready for more stimulus, but we will see how big the second PEPP programme will be
Skerdian Meta•Wednesday, November 25, 2020•1 min read
The European Central Bank opened its purse wide in spring, during the first coronavirus lock-downs, to help revive the economy, which went into a major recession. In summer the economy of the Eurozone bounced back, but it started weakening in September and services fell back in recession.
Now, after the new lock-down measures, the ECB is feeling the pressure once again, as the economy weakens further and they are getting ready for he second round of stimulus. But, the comments form the ECB vice president Luis de Guindos are not too convincing, which might turn the Euro berish, if markets are not satisfied with the new PEPP programme.
Comments by ECB vice president, Luis de Guindos
- ECB currently calibrating different stimulus options
- ECB will consider oil price, vaccine in December decision
- News of vaccine bolstered sentiment, animal spirits
- Composition of December stimulus depends on forecasts
- The goal is to keep credit flowing
The latest suggestion by de Guindos above seems to be that they may do less than what they intended to do given recent developments in the vaccine space. I reckon a combination of extending PEPP stimulus and enhancing TLTROs is still the likeliest option, but perhaps they may scale back on the size of the stimulus.
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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