MNI BRIEF: APP End, Gradual Exit Neg Rates Justified -Panetta

An end to asset purchases and a gradual exit from negative interest rates by the European Central Bank in coming months would be justified at the present time, Executive Board member Fabio Panetta said Tuesday, allowing policymakers to continue normalising policy by 'removing part of our monetary policy that is no longer needed today.' Panetta's comments comes less than 48 hours after President Christine Lagarde suggested purchases would end early in July, with a first hike later that month, followed by a second in September (MNI SOURCES1: ECB Seen Two To Three 25-BP Hikes In 2022).

However, Panetta was careful to stress that given 'exceptional levels of uncertainty,' any normalisation of policy should be done 'gradually and be data dependent -- and he pointed to clear signs of weaker leading indicators and 'signs of economic stress.'

Although adding little to the debate regarding a new tool or policy to avoid any 'fragmentation's issues across the different member states of the eurozone as policy normalised, Panetta said the ECB should be 'ready to intervene' (MNI SOURCES2: ECB Mulls Crisis Tool As Debate Spreads).