The ECB played it safe, says Columbia Threadneedle Investments

(AOF) – No big surprises at today’s meeting, as the market wasn’t really expecting a reduction in Pandemic Emergency Purchase Program (PEPP) purchases like a few weeks ago, “comments Adrian Hilton, Head of Global Rates and Currencies and Emerging Debt at Columbia Threadneedle Investments.

“But Ms. Lagarde seemed to describe a Board of Governors which only very cautiously increases its optimism on the European economic outlook,” continues the professional.

According to him, by modifying GDP growth and inflation projections slightly upwards for 2021 and 2022, but leaving the outlook for 2023 unchanged, the ECB has indicated that it does not yet see the foundations for a recovery. sustained long-term growth, especially if the labor market remains very sluggish.

“We know the central bank is sensitive to a potential tightening of funding conditions through higher market rates. It is possible that the rise in bund yields last month, when 10-year bonds briefly threatened to trade with a positive return, put the nerves of the ECB in turmoil and make it cautious about a premature withdrawal of political support “, concludes Adrian Hilton.

2021 Agence Option Finance (AOF) – All reproduction rights reserved by AOF. AOF collects its data from sources it considers the most reliable. However, the reader remains solely responsible for their interpretation and for the use of the information made available to him. Thus the reader must hold AOF and its contributors harmless from any claim resulting from this use. Agence Option Finance (AOF) is a brand of the Option Finance group

.