The members of the governing council of the European Central Bank (ECB) converge on a debate on a limited and temporary increase in the Asset Purchase Program (APP) at the December meeting, Reuters reports, citing six sources with direct knowledge of the debate.
Outstanding conclusions
The ECB could approve an envelope for APP or a time-limited increase with more frequent reviews.
April’s APP volume will be significantly lower than current app purchases like PEPP.
ECB notes unusually high flexibility and optionality.
The ECB hawks pushing not to increase the APP appear willing to compromise, fearing that doing nothing would risk market turbulence.
New ECB programs or open apps are highly unlikely to increase.
The ECB’s commitment won’t last beyond 2022, but some point to signaling that bond purchases will last at least until the end of 2022.
Market reaction
EUR / USD is pressing lows near 1.1315, shedding 0.22% on the day.
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