All eyes are on whether the European Central Bank, led by Christine Lagarde, will provide clues about the fate of its stimulus programme.took a small step towards scaling back pandemic-era stimulus but sought to reassure markets of its ongoing support as the fast-spreading Delta variant clouds the eurozone recovery.
The ECB's 25-member governing council said it would slow the pace of its massive monthly bond purchases, asThe 1.85-trillion-euro pandemic emergency bond-purchasing programme is the ECB's main tool to cushion the impact of the"The governing council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the PEPP than in the previous two quarters," the Frankfurt institution said in a statement.
The ECB stressed its"flexibility" in supporting the euro area economy and said it stood"ready to adjust all of its instruments, as appropriate". Attention now shifts to ECB president Christine Lagarde's 1230 GMT press conference, who like central bankers everywhere faces the tricky task of deciding when and how to remove stimulus without jeopardising the recovery.
Analysts expect Lagarde will try to stress that the slower PEPP pace does not amount to a"tapering" or the beginning of the end of the bank's pandemic support, at a time when the Delta variant is pushing up infection numbers across Europe.