ECB: A taper, not a tantrum - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the recent move from the ECB is a ‘taper’ – a one-off move with the option to re-expand the pace of purchases if things go wrong.

Key Quotes

 “‘Tapering’ would imply a steady reduction in the size of bond purchases, so perhaps then this is a ‘taper fade’, which is (I’m reliably informed) a hairstyle favoured by David Beckham. The ECB announcement maintains an accommodative stance for monetary policy, steepening the yield curve even as it signals that the age of central bank bond-buying is drawing to a close. That’s left us with slightly higher longer-dated Bund yields, slightly wider peripheral yield spreads in Europe and, so, a drift back down for the euro. We’ll see what the Fed does next week and then look forward to months of political uncertainty taking EUR/USD to parity.”