ECB leaves rates unchanged and reveals TLTRO details

Summary:

• ECB leaves rates unchanged as expected
• ECB sees rates at the current levels for as long as needed (at least through the first half of 2020)
• ECB to reinvest proceeds from maturing bonds under QE for extended time after the first rate hike
• A new TLTRO round has been priced at the main rate + 10 bps ECB says
• TLTRO rate can be as low as the deposit rate + 10bps

As broadly expected the ECB left borrowing costs at the current levels. On top of that, the central bank reveal details regarding the new TLTRO programme. The details look a bit disappointing as there were speculations about even a lower cost. The euro is gaining momentum as the ECB implicitly ruled out the possibility of rate cuts over the next year.

The EURUSD is bouncing back after the ECB left rates unchanged and vowed to keep them at the current levels over the next twelve months. Source: xStation5