Lagarde unleashedReport Date: 12th March, 2021
The ECB might not have changed policy rates or increased its QE programme, but the significance of yesterday’s policy tweaks should not be understated. The pace of PEPP purchases will be increased significantly over the next quarter, as the Governing Council reacts to what it sees as an “un-fundamental” rise in yields. This is de facto yield curve control. These dynamics will weaken the euro. We remain short Bunds, BTPs and US Treasuries.
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