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Matt's Market Insights

The European Central Bank meets this Thursday in one of the larger events of the week. Many commentators are pushing for an extension of the current bond buying program into full blown QE, but this is unlikely at the moment. The ECB has been steadily adding stimulus in one form or another and will probably want to allow these measures some time to play out before pulling out the big guns.

 

Draghi has pledged to add up to 1 trillion euros to the ECB's balance sheet but not in the form of government bonds. Instead they've been purchasing covered bonds, considered the safest type of bank debt, and asset-backed securities. If these steps fail to spur the economy there is still a good chance the ECB could resort to purchasing government debt.

 

Recent inflation data from Europe showed a small but important improvement that has allowed financial markets to take a quick breather. ... Log in or subscribe to continue reading.


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