Summary:
- ECB leaves rates unchanged as expected
- ECB sees rates at the current levels for as long as needed (at least through the first half of 2020)
- ECB to reinvest proceeds from maturing bonds under QE for extended time after the first rate hike
- A new TLTRO round has been priced at the main rate + 10 bps ECB says
- TLTRO rate can be as low as the deposit rate + 10bps
As broadly expected the ECB left borrowing costs at the current levels. On top of that, the central bank reveal details regarding the new TLTRO programme. The details look a bit disappointing as there were speculations about even a lower cost. The euro is gaining momentum as the ECB implicitly ruled out the possibility of rate cuts over the next year.
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The EURUSD is bouncing back after the ECB left rates unchanged and vowed to keep them at the current levels over the next twelve months. Source: xStation5
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