The ECB is specifying exactly how much in bond purchases they’ve made and what they are doing to take the exact same amount out of the system. They bought 16.5b euros of bonds last week and on May 18th they plan to begin 1 week fixed term deposits to absorb the 16.5b euros. This full sterilization announcement is leading to a bounce in the euro which is now well off its worst levels of the early morning. I know everyone hates the euro, with much reason, but the short term direction, and possibly longer term, will depend on how much the ECB wants to act like the Fed or not in terms of money printing. With today’s announcement, while expected, there is evidence that they want to be less like them.
