European stocks closed yesterday at a one-year high after the European Central Bank held its monetary policy meeting.
In an attempt to tackle the recent rise in bond yields, the ECB promised to accelerate the €1.85 trillion pandemic emergency purchase programme (PEPP) over the next quarter. Bond yields have already started to fall after the announcement.
The ECB also voted to keep eurozone interest rates as they are. The announcement was more dovish than markets had hoped, and the euro dipped initially.
ECB President Christine Lagarde told markets that eurozone GDP is expected to contract in Q1 due to “the persistence of the pandemic and the associated containment measures”.
