WHAT DOES ECB MEAN BY “SIGNIFICANTLY” MORE?

The start of the year has been marked by an upturn of several tens of basis points in Eurozone interest rates. While there are some within the Governing Council who see this in a favourable light, others, still within the European Central Bank, view this as a possible brake on the economic recovery. To resist an excessive rise in Eurozone yields, the European Central Bank (ECB) currently has two asset purchase programmes: the longstanding Asset Purchase Programme (APP) and the more recent Pandem ic Emergency Purchase Programme ( PEPP ), established to tackle the crisis linked to the COVID-19 pandemic. On the occasion of the meeting held on 11 March, the ECB’s Governing Council indicated that it expected purchases under the PEPP to be conducted at a “significantly” higher pace over the next quarter . Following the announcement by ECB President Christine Lagarde, expectations are running high, and one can expect upcoming weekly data concerned PEPP purchases to be scrutinised. Will the ECB succeed in ramping up significantly the pace of its purchases? What is the high water mark for monthly purchases? What level will be considered as sufficient by the market? There are questions aplenty.