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2020/06/12 / Erste Group Research

Is the market euphoria premature?

The ECB's increase of the PEPP by EUR 600bn was slightly above market expectations. The increase in program volume with simultaneous extension until at least the end of June 2021 was well received on the markets.

The coming weeks will show whether the market participants' euphoria generated by central bank liquidity and economic stimulus programs will last. In addition to a habituation effect seeting in after the PEPP increase, negative economic and corporate data could dampen the mood in the coming weeks.

The Federal Open Market Committee (FOMC) met on Wednesday. As expected the Federal Reserve did not cut interest rates further. The Fed indicated, however, that interest rates would remain at their low level at least until the end of 2022. The asset purchase activities will continue at their current rate for the foreseeable future. No timeline for an end of these activities was given.

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General information

AuthorErste Group Research
Date2020/06/12
Languageen
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria, Eurozone
Currency in focusEuro
Sector in focus-
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