As TS Lombard also shows, the PEPP has been skewed far more toward Italy and Spain than the predecessor APP, or Asset Purchase Programme. When it came to fighting Covid, this made sense. But continuing the PEPP will make the politics of the euro zone very complicated once more:
The key questions are the level of future purchases, along with Lagarde’s guidance on how long the PEPP will continue. This is TS Lombard’s handy graphic summary:
The ECB is likely to opt for something at the lower end of this range of possibilities. If Lagarde announces an intention to spend 27 billion euros ($33 billion) on PEPP per week until the middle of 2022, that will be very expansionary, and it will suggest that the more cautious “Bundesbank” voices have been overruled. It might also suggest that the central bankers are dubious about the hopes for joint fiscal policy. The dilemmas with which Covid confronts policymakers around the world aren’t over yet.
Survival Tips
If you want to know how to make latkes, the fried potato pancakes that go with Chanukkah meals, the Maccabeats (local heroes in my Upper Manhattan neighborhood), offer a Latke Recipe. After dinner, you are supposed to play dreidel, a game with spinning tops. This gives rise to the Dreidel Song, a song even more irritating than the average Christmas song, unless performed by the Maccabeats (listen to the whole thing to catch the Bohemian Rhapsody reference at the end). Chag sameach, everyone.
John Authers is a senior editor for markets. Before Bloomberg, he spent 29 years with the Financial Times, where he was head of the Lex Column and chief markets commentator. He is the author of The Fearful Rise of Markets and other books.
Thursday night sees the beginning of Chanukkah, the eight-day-long Jewish holiday that celebrates the rebellion of the Maccabees. It’s a very sweet winter rite, in which Jews light an extra candle on the Menorah each night, and eat plenty of oily food to celebrate the miracle by which the oil in the lamp in the temple survived for eight days without running out.