Time for ECB to do more: analysts

According to financial institution Ebury, the ECB should increase the scale of the PEPP (Pandemic Emergency Purchase Program) by €500 billion this week. The main central bank is expected to announce its latest monetary policy decisions already on Thursday. Investors are waiting for information on increasing the scope of monetary stimulation.

Already in April after the bank meeting, it was mentioned that "The Governing Council is fully prepared to scale up and adapt the structure of the PEPP program to the extent and for as long as necessary." It is clear that the bank wants to mitigate the risk of the Covid-19 pandemic.

Among others, due to the fact that the ECB clearly suggested the possibility of increasing the PEPP program, such a scenario is also largely expected by the markets. Hence, the main question in the context of the upcoming decision is how much decision-makers decide to increase the scale of purchases.

"The current ceiling of €750 billion is undoubtedly high, but it represents only 6 percent of the total GDP of the eurozone, suggesting that the European Central Bank could do more," say analysts at Ebury.

(WBJ)