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ECB promises more, but keeps it flexible

The ECB’s policy statement this week pledges more support, but leaves plenty of room for disputes over the meanings of a “significantly higher pace” of asset purchases and “favourable” financing conditions. We suspect that the Bank will buy enough bonds to push peripheral yields down further from current levels in the coming weeks. Meanwhile, Sunday’s state elections in Germany may be crucial in determining who the Christian Democratic Union puts forward as “Chancellor-candidate” for September’s federal elections.

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