ECB surprises investors by saying it will cut its monthly buys from April
Frankfurt — The European Central Bank (ECB) caught financial markets off guard on Thursday by announcing it would trim asset buys from April next year, even as it reserved the right to increase purchases again if the eurozone’s recovery faltered. The ECB said it would cut monthly purchases to €60bn from the current €80bn but extend the buys until the end of 2017. Markets had expected purchases to stay at €80bn but only for six more months, suggesting a compromise between hawks and doves in the governing council. The euro initially jumped to a three-week high after the announcement, but quickly retreated to be flat on the day. Bond yields across the single currency area also rose, but pared gains later. "The bank has extended its quantitative easing programme until December, which is more than what the market was expecting," said Naeem Aslam, chief market analyst at ThinkMarkets. "However, the bank is going to reduce their firepower after March and will only be purchasing €60bn. So y...
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