ECB WATCH| On hold, with focus on preserving favourable financing conditions

Summary

Today’s wait and watch policy meeting suggests that the ECB will stay put in the short to medium-run regarding monetary policy, awaiting better clarity on the evolution of the pandemic, the recovery and financial conditions, while continuing to use the PEPP with high flexibility, preserving favourable financing conditions.

Key points

• Key points:
• January was a transition meeting for the ECB, with status quo on rates, stimulus program as well as policy guidance
• No hints of policy change in the near term, with the ECB ready to adjusts its instruments, if necessary, in either direction
• Will monitor FX very carefully

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