"The main focus for the ECB in today's meeting was undoubtedly the tightening in financial conditions seen over the past few weeks, mostly driven by the surge in yields globally. Today's policy decision to "significantly" step up the pace of PEPP purchases in response to this tightening came as no surprise, especially in light of ECB's recent shift focusing on preserving "favourable financing conditions". While the exact details of intended purchases have not been announced, Lagarde emphasised that the programme's flexibility will be used to adjust purchases across countries as required. Not committing to a specific pace of purchases seems like a very sensible decision in light of heightened European and global uncertainty on the pandemic trajectory, policy actions and pace of economic recovery.
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