ECB playing it safe

If yesterday’s ‘steer’ from Bloomberg on the ECB meeting today proves to be true, then the ECB is going to fall into line with our expectations. At the middle of last week, the markets were just about fully priced for a 25bp easing of policy today. The markets are now placing around an 80% probability of that outcome. It’s likely that this tempering of rate expectations is based partly on the belief that the ECB may be, or may indicate its intention to be, more aggressive with respect to bond

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