By Reuters Staff
1/ ECB DAY
FILE PHOTO: European Central Bank (ECB) headquarters building is seen in Frankfurt, Germany, March 7, 2018. REUTERS/Ralph Orlowski/File Photo
The European Central Bank meets on Thursday and will likely be pressed on signs of divisions over the future pace of bond purchases, which have been stepped up recently to prevent a rise in borrowing costs from derailing the recovery.
Dutch central bank head Klaas Knot believes the acceleration is temporary, while ECB chief Christine Lagarde says the economy is still standing on “crutches” and stimulus cannot be withdrawn.
The euro area is still grappling with lockdowns and a third wave of COVID-19 but business activity appears to be holding up. The April flash purchasing managers index on Friday should provide fresh clues on the outlook. Signs of a swift recovery could raise questions over when the ECB will slow its bond buying, putting recent bond market calm to the test.