The European Central Bank convenes on October 26th and they had promised us some kind of news on the future of the bond-buying program. The ECB currently buys 60€ billion worth of government and corporate bonds a month and this program is set to run until the end of the year.
In 2018, Draghi and co. are set to reduce the scheme as the economy improves, but also want to keep the foot on the pedal, to support the economy and push inflation higher.
And now, we get some reports about the next moves. According to Bloomberg, the ECB is considering halving the level to 30€ billion per month. That would be a significant drop. However, if they don’t pledge an end date. One option would be to announce that the plan continues through September 2018, and making a new decision on the fly.
Another report, by Reuters, talks about a range between 25 to 40 billion euros per month and also here, the program would be extended to September. Clearly, there is a significant difference between both sums.
The ECB officially declined to comment, but the leaks continue.
We did hear from Benoit Coeuré, which warned against using non-standard tools (such as QE) for an extended period of time. It could cause bubbles.
EUR/USD trades around 1.1840, lower than the highs seen yesterday but the pair is certainly limited in its range. The Catalan crisis has less influence than it used to, but it could return to the headlines soon.
