Europe - ECB (May 08 - Dec 24)

[winston]

The European Central Bank (ECB) is speeding up its quantitative easing (QE) program…

Since the ECB began QE in March, it has been buying 60 billion euros of bonds each month.

But in a speech earlier this week, ECB Executive Board member Benoit Coeure said the central bank will "front load" the program in May and June – by buying even more than 60 billion euros of bonds each month – to make up for an expected "low liquidity" period during the slow summer months. He said the bank may also "back load" with bigger bond purchases in September.

Please Enable Images to See this Coeure said the recent plunge in European bonds is "no cause for concern," but that the "rapidity of the reversal" was worrying. He also claimed the announcement was not intended to calm the recent volatility in European markets before the summer slowdown in trading, but that's exactly the effect it had…

European stocks and bonds rallied on the news, while the euro tumbled as much as 1.6%.

Coeure didn't say how big the "front loaded" purchases would be, but the takeaway is clear: ECB head Mario Draghi and his team are committed to doing whatever it takes to engineer their own version of the "Bernanke Asset Bubble" in Europe. The table is set for a massive rally in European stocks.

Source: Growth Stock Wire

[behappyalways]

ECB cuts growth and inflation outlook
http://www.bbc.com/news/business-34139583

[behappyalways]

Mario Draghi gives the V-sign but a dangerous QE day looms
http://www.telegraph.co.uk/finance/comm ... looms.html

[behappyalways]

End QE now or risk a new financial crisis, warn Germany's 'Wise Men"
http://www.telegraph.co.uk/finance/econ ... e-Men.html

[winston]

TOL:-

Watching Drahi "Whatever It Takes" on CNBC.

It gives me the feeling that Europe is in serious deep trouble.

I would be very careful with European Equities going forward.

Deflation, Demographics, Refugees, Recession, Falling Real Estate, Plunging Currency .... anything else that I have missed ?

[winston]

EUR dropping to 0.85 ? Negative interest rates of 2% ?

Draghi Says ECB To Re-Examine Monetary Policy At December Meeting

The European Central Bank will re-examine the degree of monetary policy accommodation at the December meeting, President Mario Draghi said Thursday.

"We will closely monitor the risks to price stability and thoroughly assess the strength and persistence of the factors that are slowing the return of inflation to levels below, but close to, 2 percent," Draghi told the European Parliament's Economic and Monetary Affairs Committee in Brussels.

The asset purchase programme is considered to be a particularly powerful and flexible instrument. "Other instruments could also be activated to strengthen the impact of the purchase programme if necessary," Draghi added.

Further, he observed that downside risks stemming from global growth and trade became clearly visible. Moreover, signs of a sustained turnaround in core inflation have somewhat weakened, he said.

Draghi noted that a sustained normalization of inflation could take longer than anticipated in March.

by RTT Staff Writer

[winston]

Draghi's `Whatever It Takes' Was Confidence Trick, Stiglitz Says

by Jan-Henrik Foerster

Joseph Stiglitz, the Nobel-prize-winning economist, said that Mario Draghi’s 2012 pledge to shield the euro zone, only papered over the cracks that are caused by the faulty design of the currency bloc.

“If push comes to shove there will be nothing there behind that assertion, particularly given the political economy,” he said.

There’s a “real risk of the next bout of the euro crisis -- the likelihood that they muddle through is very high at enormous cost of continuing stagnation.”

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... glitz-says

[winston]

ECB cuts key rate, primes anti-deflation guns

By Simon Morgan

Source: AFP News

https://sg.news.yahoo.com/ecb-lowers-ke ... 05171.html

[winston]

ECB extends its asset buying programme

FRANKFURT: The European Central Bank (ECB) adjusted its asset purchase programme known as quantitative easing on Thursday, extending the scheme’s duration into 2017 and agreeing to buy euro-denominated municipal and regional bonds, ECB president Mario Draghi said.

Purchases of mainly government bonds - at 60 billion euros (RM272.9bil) a month - are now seen running until at least March 2017 instead of next September.

He also said that proceeds from the various assets bought would be reinvested back into the scheme.

“We decided to extend the asset-purchase programme. The monthly purchases of 60 billion euros under the asset-purchase programme are now intended to run until the end of March 2017 or beyond if necessary and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its aim of achieving inflation below but close to 2% over the medium term,” Draghi said.

Analysts polled by Reuters last week had expected the ECB to increase the monthly purchases to 75 billion euros (RM341.1bil) as well as extending the purchases.

The purchases have pushed down yields and boosted lending, indicating that quantitative easing (QE) was working, even if only slowly and with a lag, supporting calls for more asset buys.

But critics have said QE has done little for inflation so far, the ECB’s biggest worry, with headline figures hovering near zero and core inflation around 1%, well short of the central bank’s target of nearly 2%.

Source: Reuters

[winston]

ECB cuts key rate, primes anti-deflation guns

The governing council decided that the key deposit rate, already in negative territory, would be lowered by a further 0.10 percentage point to minus 0.30%.

Source: AFP

http://www.thestar.com.my/business/busi ... ?style=biz