ECB’s QE to continue, albeit at a slower pace – Danske Bank

Jens Pedersen, Senior Analyst at Danske Bank, assessed yesterday’s ECB meeting and its prospects for the ‘quantitative easing’ programme.

Key Quotes

“The ECB kept all policy measures unchanged and maintained its readiness to increase the size and/or duration of QE purchases”.

“According to President Mario Draghi, the Governing Council was unanimous in setting no precise date on when to discuss changes to the QE programme but argued that, 'our discussion should take place in the autumn '.

“Additionally, Draghi said the ECB has not tasked its staff with looking at QE options beyond December 2017. The above suggests the ECB is not ready to make an announcement at the September meeting on how QE purchases will continue in 2017”.

“We maintain our view that the ECB will continue its QE purchases but at a reduced pace of EUR40bn per month in H1 18, but now believe this will be announced at the October meeting (previously September)”.