ECB minutes confirm QE debate is open. The minutes of the September 6-7 policy meeting confirmed that officials finally kicked off the open discussion on an adjustment of policy measures as the end of the current QE program comes into focus. Officials discussed “general trade-offs inherent in various scenarios for the future re-calibration of the APP and, in particular the choice between the pace and the intended duration”. This debated the merits of a longer QE extension at lower levels, versus a shorter duration at higher monthly asset purchase levels. Officials clearly are aware and weary of market reaction and investor expectations and the minutes stressed that “any reassessment of the monetary policy stance should proceed in a very gradual and cautious manner, while maintaining sufficient flexibility”, as there was “broad agreement” that substantial support was still needed. Officials also agreed that the currency still needed monitoring. So under debate seems mainly another QE extension, with the main point of debate, the length and the volume. It doesn’t seem as though the ECB is ready to commit to a full tapering schedule with a fixed end date for asset purchases. EURUSD dipped to day lows around 1.1735 and well off earlier highs at 1.1778. 1.1745 is now resistance to a move north, next up a speech by the ECB’s Coeure, Weekly US Jobless numbers and the Trade balance.
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