12 Jan 2015
ECB Quantitative Easing: not if, but how? – Growth Aces
FXStreet (Barcelona) - The Growth Aces Team believes that the main concern is not about when the ECB will start monetary easing but how big will be the scale of the same, further adding that a lower scale of easing might boost the EUR/USD to the upside.
Key Quotes
“Ignazio Visco, who sits on the ECB's Governing Council, said: “If the inflation figures remain very low for too long and the economy hardly grows, we risk being drawn into a downward spiral that will intensify itself on and on”.”
“A German member of the European Central Bank's Executive Board Sabine Lautenschlaeger has called into question the need for the ECB to buy government bonds, saying that the risks currently outweighed any rewards. Her comments join a chorus of criticism in Germany of ECB plans to print fresh money to buy government bonds.”
“In our opinion recent comments from the ECB suggests that the decision on quantitative easing is almost a done deal despite German objections.”
“The question is not if the ECB implements the quantitative easing, but how large will be the scale of the programme.”
“In our view quantitative easing has been already priced in the EUR/USD level. That is why we expect profit taking on recent EUR-selling positions and higher EUR/USD levels in the medium term. Lower scale of the programme may disappoint investors and lead to even stronger rise in the EUR/USD.”
Key Quotes
“Ignazio Visco, who sits on the ECB's Governing Council, said: “If the inflation figures remain very low for too long and the economy hardly grows, we risk being drawn into a downward spiral that will intensify itself on and on”.”
“A German member of the European Central Bank's Executive Board Sabine Lautenschlaeger has called into question the need for the ECB to buy government bonds, saying that the risks currently outweighed any rewards. Her comments join a chorus of criticism in Germany of ECB plans to print fresh money to buy government bonds.”
“In our opinion recent comments from the ECB suggests that the decision on quantitative easing is almost a done deal despite German objections.”
“The question is not if the ECB implements the quantitative easing, but how large will be the scale of the programme.”
“In our view quantitative easing has been already priced in the EUR/USD level. That is why we expect profit taking on recent EUR-selling positions and higher EUR/USD levels in the medium term. Lower scale of the programme may disappoint investors and lead to even stronger rise in the EUR/USD.”