[ROLLING HEADLINE] ECB PRESS CONFERENCE
OUTLOOK
- Near-term outlook is clouded by uncertainty amid COVID resurgence; continues to constrain activity in the short-term
- Still sees rebound in activity this year
- Inflation rebound transitory; temporary effects in inflation data likely to phase out early 2022; inflation expectations are at subdued levels
- Risks to wider financing conditions remain
- Outlook is subject to two way risks: signs of improvement in the economy, rolling out vaccines, but there is continued contagion and pressure on health and economic sectors
APP/PEPP
- Governing Council did not consider PEPP purchase reduction; premature to discuss tapering; reduction of PEPP is data-dependent, not based on calendar guidance
- Weekly asset purchases data are less important than the monthly figures; again claims ECB has significantly raised the level of its purchases, adds will continue to do so
- Claims there has been an increase in PEPP, and it will continue in that manner
MONETARY POLICY
- Reiterates central bank's forward guidance on rates, and reiterates PEPP guidance
- The significant, flexible pace will continue to prevent tightening of financial conditions
- If favourable financing conditions can be maintained, the envelope need not be used in full; equally, says can readjust paces if needed
- Will continue to provide ample liquidity via refi operations
- Lagarde says it would be nice to move in tandem with the Fed, but Lagarde notes differences in inflation situation and expectations; "we are not on the same page", so ECB will not operate in tandem with the Fed
- Lagarde says the central bank is not conducting 'yield curve control'
ECONOMY
- Financing conditions remain broadly stable
- Underlying price pressures remained subdued amid slack and weak demand
- Surveys point to activity contracting in Q1, but will rebound in Q2
- Solid global demand, although service sector remains constrained; there are signs of bottoming-out in the services sector, however; business investment has shown resilience
- Near-term risks continue to tilt to the downside, though medium-term risks are more balanced (repeat)
FX
- Will continue to monitor FX developments
22 Apr 2021 - 14:30- Important- Source: Newsquawk
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