According to Market News Internation (MNI) citing sources, the ECB is seen buying between €40 ad €60B in bonds per month after March, despite rising fears about inflation.
For reference, the ECB's Pandemic Emergency Purchase Programme (PEPP) is scheduled to finish at the end of March 2022 and ECB members have been keen to avoid a sudden, sharp drop-off in the volume of monthly bond purchases. Sources speaking with financial press earlier in the week suggested that an agreement was forming on boosting the bank's pre-pandemic Asset Purchase Programme (APP) in a temporary/time-limited manner from March.
ECB members are keen to avoid disorderly bond market developments (such as a significant widening in Eurozone bond yields spread), despite growing fears on the council about inflation perhaps running above target for longer than previously expected.
Market Reaction
EUR/USD has not seen much of a reaction to the latest sources and continues to trade subdued to the south of 1.1300 as markets await US inflation data at 1330GMT.
