Monetary policy meeting of the ECB
Thursday's ECB monetary policy meeting will be a bang for the buck. Expectations remain high that the ECB will raise rates by 75 basis points, but even if it is only 50 basis points, it will tighten monetary policy through other means, notably the asset purchase program (APP), which remains in full swing, and the PEPP, as well as the TPI (transmission protection instrument) introduced in July to limit divergences in bond spreads. Surprisingly, sentiment is more negative than indicators suggest, as Econoday points out, "...not only is the ECB now much more focused on fighting inflation than boosting growth, but economic activity in the eurozone has exceeded market expectations anyway." This is a vote for 75 bps.