As it was expected, the ECB is keeping rates unchanged and ending QE as soon as possible on July 1. This is an indication that rates will be raised in July (next meeting) by 25 bps and another rate hike in September.
- ECB's statement about July 25bp hike rather negates chances for bigger move, while indicating that September hike will depend on outlook (still 50bp chance here)
- Big September hike possible if inflation outlook grows
- Inflation forecasts higher than previously, GDP forecasts lower (2.8% for 2022)
- PEPP reinvestment to last until 2022 (so no balance sheet reduction for now)
Markets were quite volatile, but ultimately the euro gains, DAX loses, yields rise after the decision.

Source: xStation 5
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