The European Central Bank has launched a 'bazooka' $820 billion pandemic fund to aid markets. 'There are no limits.'

• The European Central Bank (ECB) has unveiled a new €750 billion ($820 billion) response to the coronavirus in a bid to calm financial markets.
• The so-called Pandemic Emergency Purchase Programme (PEPP) comes less than a week after the central bank announced policies which did little to provide comfort to traders.
• It follows similar plans by the Federal Reserve and numerous major economies to stem the damage from Covid-19.

The European Central Bank (ECB) has unveiled a new €750 billion ($820 billion) response to the coronavirus in a bid to calm financial markets.

The so-called Pandemic Emergency Purchase Programme (PEPP) comes less than a week after the central bank announced policies which did little to provide comfort to traders. In a tweet, ECB boss Christine Lagarde said: "Extraordinary times require extraordinary action. There are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate."

The ECB had been under pressure to respond following a decision by the Federal Reserve Sunday to provide a $700 billion stimulus package while also bringing interest rates close to zero in the US.

PEPP will purchase public and private sector securities until the end of 2020. "The Governing Council is fully prepared to increase the size of its asset purchase programmes and adjust their composition, by as much as necessary and for as long as needed. It will explore all options and all contingencies to support the economy through this shock," the ECB said in a statement.

"As cumbersome as it sounds, the €750 billion fund looks more like a bazooka than anything they've done thus far," said Neil Wilson, chief markets analyst at markets.com in a morning note. "Christine Lagarde and co knew they had to step it up and have."

Yield spreads between Italian and German bonds had widened to 320bp previously before coming back in around 188bp following the news. European equities are trading higher following the news with the Euro Stoxx 50 up 1.5% as of 9.30 a.m. in London (5.30 a.m. ET).