Ahead of the European Central Bank meeting, European stocks rose. Traders already have renewed bets on economic recovery as ECB decided to keep monetary policy loose for the foreseeable future.
For the first time, The European Central Bank is switching to a symmetric 2% inflation target. The main intention is to replace the Pandemic Emergency Purchase Program. It can reach €1.85 trillion of government bond purchases.
The strategists at Credit Suisse said, “We believe that the meeting may deliver some dovish tweaks to the ECB’s language and forward guidance that reflect changes announced in the recent monetary policy strategy review, in particular the ECB’s statement that monetary policy needs to be ‘especially forceful or persistent when the policy is set close to the looser end of the spectrum.”
An analyst at Dutch broker AFS Arne Petimezas said, “Because of the ECB’s ‘strategy review’ the language in the statement will change from long and thick jargon to something shorter and easier for lay persons to understand. But it will not have any effect on near-term policy nor on the forward guidance.”