• ECB policymakers worried that market stress may hinder monetary policy
• Want new instrument to be ready for July meeting
• Likely to offset bond-buying with the new instrument

The report by Bloomberg adds that the tool would probably involve „selling other securities“ so purchases do not clash with their efforts to tighten policy. Essentially, this is QE but not exactly QE in some form of convoluted way.

However, just be wary that even if the ECB ‚wants‘ the new instrument to be ready in the next few weeks, it doesn’t mean that it will happen. I would expect policymakers to go through a series of alternatives and then iron out the nooks and crannies before finalising anything. And summer time in Europe could make it harder to manage timelines.

EUR

This article was written by Justin Low at www.forexlive.com.