The European Central Bank policymakers are moving close to a temporary increase in the regular bond purchase program that would reduce overall debt buys.
- The move seeks to maintain bond yields after the ECB’s trillion euro Pandemic Emergency Purchase programs come to an end.
- There is a debate surrounding a compromise around boosting the long-running Asset Purchase Programme (APP), but there are limits on the size and period of the commitment.
- Even though the key details of this boost are still under discussion, the ECB could address the things. Policymakers could approve a purchase envelope until the close of the year.
- Alternatively, the ECB could raise the buys for a shorter period with the commitment that the purchases would still continue afterward, but their size is likely to fall.
The bond purchases from April would be smaller than the combined volume of the emergency and legacy programs utilized now.
DXY up +0.19%, EUR USD down -0.26%Source: Reuters