ECB’s Wunsch Speaks on Eurozone’s Current Economic State
The European Central Bank (ECB) policymaker, Pierre Wunsch, is relieved with the current economic state of the eurozone. Wunsch spoke earlier about the eurozone economy and forecasted that it is poised for five years of private financing above pre-pandemic levels once households are able to spendly freely again.
Due to the fact that expenses on holidays and social outings have been put on hold because of the pandemic, households in larger eurozone countries have managed to save up almost a quarter of their disposable incomes. This could mean that spending could be maintained above pre-pandemic levels for many years to come, which could mean more economic growth for the eurozone.
ECB’s Wunsch has reiterated that financing conditions would be kept at a favourable level for governments, households and firms, stating that they would speed up the pace of their Pandemic Emergency Purchase Programme (PEPP) to counteract any rises in borrowing costs.
Speaking on current levels of bond yields, Wunsch said that the ECB was happy with current results and a 10-20 basis point rise wouldn’t be damaging to the government as long as the 10 year financing cost on the market was below the expected rate of inflation.
EUR/USD continues to push higher after Wunsch’s comments and was last seen gaining 0.22% on the day at 1.1837.