Comments by ECB governing council member, Madis Muller
- Near-term inflation expectations are very low
- PEPP must be a temporary programme
- Change in tiering multiplier was not considered last week
The key word in the headline remarks is 'if' of course. Should the market threaten to throw a tantrum and there is no real return to inflation pressures in the region, it will be tough to imagine the ECB weaning the market off its recent measures until 2022 at the earliest.
The remark on tiering is also interesting. It shows that the ECB deems that banks have sufficient capital/liquidity and they aren't going to unleash more of that for now at least.
EUR/USD is keeping around 1.1350 currently, with the dollar mildly weaker on the session but the market is keeping the focus on the Fed later today.
