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ECB extends its QE programme until March 2017 or beyond

Thursday, Dec 03 2015

The 25-member Governing Council, meeting in Frankfurt on Thursday, reduced the rate by 10 basis points to minus 0.3 percent. That’s in line with the move forecast by economists. Policy makers left the main refinancing rate and the marginal lending rate unchanged. On the following Press Conference, ECB President Mario Draghi  said that the ECB extends the asset purchase programme to run until March 2017 or beyond if necessary and in any case until the Governing Council sees an improvement in inflation.

The ECB decided to reinvest the principal of assets bought under QE. It will also include local government bonds in QE. It also also announced it will continue conducting the MROs and 3-month LTROs as fixed rate procedures with full allotment as long as necessary.The prospects for growth are broadly unchanged since September, however ECB now sees HICP inflation at 0.1 per cent in 2015, 1 per cent in 2016 and 1.6 per cent in 2017. The outlook for HICP inflation has been revised downwards slightly.

 

Euro was pushed higher during the Conference and is currently being traded few points above 1.08 handle. Pair is likely to find support around 1.0750 level and resistance above 1.0880 area.

More in this category: « Unemployment Claims increased to 269,000 Non-Manufacturing PMI fell more than expected »

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