Markets have a certain expectation about the end of the net asset purchase programme (APP). We try to see if this fits with the narrowing between the inflation objective and market indicators of inflation expectations. For example, I look at the gap between the objective of below, but close to, 2% and the 5-year/5-year forward swaps-derived inflation rate, which is now at 1.7 percent.
So the gap is narrowing, which is why markets don’t expect us to continue the APP much longer. Market prices seem to be coherent with the narrowing of the gap between market-based inflation expectations and our objective. It’s a good sign. There is a convergence between market expectations and our intended end date, with the optionality.