ECB WATCH | Confident but ready to calibrate

Summary

The meeting did not provide any surprises on the reaction by the ECB to the hottest topics - inflation figures and the appreciation of the euro. The ECB continues to be very cautious but does not seem to be ready to extend the PEPP for the moment, unless further risks on the pandemic and on the economy materialize.

Key points

• Key points:
• The ECB kept monetary policy unchanged, as expected. Extension of the PEPP was not discussed
• The Governing Council showed some concern over the implications of euro appreciation for inflation, but with the usual language that they do not target the euro.
• The strategy review by the ECB will proceed as expected and will be published in the second half of 2021

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