ECB vows to extend QE past September if needed

The European Central Bank kept all its main policy settings unchanged and reiterated that its asset purchase programme may run past September, if needed, contrary to some analysts' expectations.

However, the ECB omitted the reference to the possibility that it might increase the size or duration of its APP if "the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation."

Following the announcement, all eyes shifted to ECB president Mario Draghi's press conference at 1330 GMT.

The overnight interest rate was steady at 0.00%, while those on the marginal lending facility and deposit facilities were kept at 0.25% and -0.40%, respectively.

The Governing Council also reiterated that: "net asset purchases, at the current monthly pace of €30 billion, are intended to run until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim."

So too, the Council said it would continue to reinvest the principal payments from maturing securities acquired under its asset purchase programme well beyond its end date and for as long as necessary.

On the ECB statement, Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said the governing council's guidance on QE has been changed, albeit not in the way expected, with the commitment to increase the 'size and duration' of the program if the outlook worsens having been scrapped.

"This is slightly odd in our view. Taken by the letter, it means that the ECB potentially is willing to continue buying €30bn per month beyond September, but has jettisoned the willingness to adjust the program in response to a change in economic conditions.

"Apart from being a contradiction, it also locks in the ECB to a narrow range of policy choices. In any case, these are word games in the end, and Mr. Draghi naturally will be quizzed on this at today's presser."