Nomura Research discuses its expectations for the ECB policy trajectory.
"We maintain our ECB view as follows:
1- We expect the ECB to use its PEPP envelope in full — on our expectations it should be exhausted by the first week of April 2022 — and end the programme thereafter. We do not think the ECB will expand its PEPP.
2- In our view, the ECB will increase the pace of its APP purchases from €20bn per month to €40bn per month in December 2021. We expect it to implement higher purchases from the start of Q2 2022, when the PEPP will come to an end," Nomura notes.
"3- In order to stabilise markets as the PEPP comes to an end, we think the ECB will announce in December an additional €140bn temporary APP envelope, to be used flexibly over time depending on market conditions, from the start of April until end-2022," Nomura adds.