DAVY VIEW

Yesterday’s ECB decision to expand the Pandemic Emergency Purchase Programme (PEPP) to €1350bn took markets by surprise. This means ECB PEPP purchases of Irish debt will likely rise towards €10bn in 2020 (from €3bn currently) and to €17bn by June 2021. Total ECB purchases of Irish debt will likely be €10-11bn in the remainder of the year, a substantial proportion of, if not equivalent to, remaining Irish sovereign debt issuance in 2020.