Highlights of the ECB decision:
- Deposit rate -0.50% vs -0.50% exp
- Marginal lending facility +0.25% vs +0.25% exp
- Says risks clearly tilted to the downside
- ECB will carefully assess incoming information, including pandemic and prospects for vaccines and developments in the exchange rate
- New round of forecasts in Dec will allow a thorough reassessment of the economic outlook and balance of risks
- On bases of Dec assessment, ECB will recalibrate its instruments as appropriate
- Repeats that rates to remain at present or lower until it has seen inflation outlook robustly converge to a level sufficiently close to but below 2% within its projection horizon and such convergence has been consistent
- Repeats that PEPP purchases will continue until at least June 2021
- Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20 billion
- Full text
The ECB didn't deliver the surprise that some were expecting after the late-breaking lockups but they certainly put December in play. The pledge to 'recalibrate' in December based on the new forecasts is about as strong of a commitment as they can offer to do more. The market will certainly anticipate more action now but that was already priced in.
The press conference will begin at 1330 GMT.
