ECB’s QE is getting nearer.
The persistent deflationary pressures have recently been exacerbated by the plunge in oil prices. As a result, the ECB is in a dire need to expand its balance sheet to support inflation expectations. As a result, a full-blown QE would make such objective more efficient than by relying only on TLTRO and the current asset purchases programme. The hints given by Mr Draghi that purchases of sovereign bonds would be within the ECB’s mandate and that a unanimous decision by the Governing Council is not necessary confirm the imminence of a “sovereign QE”. Coupled with persistent improvement in the US job market, the decline in EUR/USD is far from over.
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