Market comment - ECB unlikely to change policy next week

Davy Research
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The consensus is that next week’s ECB meeting will yield no change in policy, indicating that it will use the flexibility of the Pandemic Emergency Purchase Programme (PEPP) to ensure favourable financing conditions. Instead, the focus will be on how large a negative impact the ECB believes fresh lockdowns will have on GDP growth in 2021. The attention yesterday on the account of the ECB’s last policy meeting, that PEPP purchases may not be constant over time, is misplaced, especially since the monthly pace has varied markedly in 2020.