ECB considers new stimulus to fight Brexit slowdown – business live

Discussion in 'Market News' started by Lily, Sep 8, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    European Central Bank expected to cut its growth forecasts today, and could boost its QE programme soon

    7.46am BST

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    The thermometers in Frankfurt are heading towards 27 degrees today - not bad for mid-September. And the temperature is rising inside the European Central Bank too, as policymakers ponder the state of the eurozone economy.

    To avoid having shortage of bonds to buy, Draghi needs rising yields now.

    probably admit today that the ECB’s $1.9 trillion QE program will run beyond March,

    We expect the ECB to switch back into easing mode after the summer break. We believe there is a strong possibility that the duration of the buying program will be extended to September 2017 or beyond.

    This will be supplemented by some technical adjustments to the modalities of the easing program to relieve the constraints on buying more assets, especially, the shortage of German bonds.

    This switch back to easing is driven by the persistent anaemic inflation dynamics in the single currency union and the growing realisation that monetary policy stimulus remains the only major source of support to the economy. Without further action, there is a strong risk of tightening of financial conditions to the detriment of the ongoing gentle recovery.

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