the major talking point from today's ECB
meeting is the decision to cut asset
purchases by half from sixty billion a
month to thirty billion a month and this
was largely expected but it does amount
to an extension of quantitive easing for
a further nine months another 270
billion of assets being purchased Draghi
referred to this in his press conference
as a downsize rather than an explicit
tapering so it's interested in a
language that's been used to perhaps
more important than the asset purchase
decision is the clarity around long-term
interest rates so the ECB has made it
clear that interest rates will remain at
their current levels for well beyond the
horizon of these net asset purchases and
that has been reflected in markets
immediately after the meeting the German
10-year bond yield is down five basis
points Spanish Italian yields are down
ten basis points so we've had a
reasonable move in in the markets given
that this was broadly expected by pretty
much everyone his 30 billion cut the
euros fallen half a percentage so again
you know a similarly muted move but
probably linked to this clarity around
interest rates we've also seen an uptick
in european stocks and the final
important thing for the meeting today
really was the the clarity around
reinvesting maturities of of bonds that
ECB already holds bearing in mind draggy
did point to this in december 2015 at
that point they were really really sort
of much notice of it but now they have
over two trillion of assets and these
are maturing on a weekly basis the ECB
is committed to reinvesting the proceeds
of those maturing bonds analysts at UBS
estimate that this could amount to
another 100 billion of effective
purchases next year 180 billion in 2019
so aside from the cut in purchases
that's been announced a 30 billion
there's also this this silent additional
contribution to the market that's going
to be going on in the background