Draghi Disappoints Markets With His “Mini” QE2

Expectations for Draghi’s second QE programme were running so high that, in the end, he disappointed the markets. Investors had bet on more aggressive stimuli, so the European stock exchanges tumbled over 3% at the close (having been in positive territory mid-morning). The euro jumped to over 1,09 dollars (its biggest rise since March) and European debt registered its largest increase so far this year.

Spain CPI up 0.6% mth-on-mth; but yr-on-yr trend still negative

The day after Draghi warned about greater than expected weakness in Eurozone inflation data, Spain’s final October inflation number has been published, confirming the -0.7% year-on-year preliminary figure. But despite the fact inflation remains in negative territory, the CPI rose 0.6% month-on-month.

Draghi corners Tsipras

MADRID | By JP Marín ArreseTsipras rebellion was ruthlessly quelled by the ECB governing board last night. Neither Greek sovereigns, nor publicly-guaranteed bond issues, will stand as eligible collateral for funding facilities, thus plunging the financial system into a crippling credit-crunch. The emergency liquidity arrangement managed by the local central bank severely caps new public financing to a meagre €3.5 billion amount. The new government faces the unpalatable choice between surrender or bankruptcy.

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Draghi holds the winning cards

MADRID | By JP Marín ArreseAttempts to convince Tsipras and his colleagues to call off their open mutiny against the discipline imposed under the Greek bailout seem to be doomed. The Greeks bet on a strategy that forces European partners to cave in, should the prospect of huge turmoil materialise. After all, they are fully aware that Greece will prove unable to repay its debt unless it grows at 7% rate for the coming 30 years. 

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D-Day as Varoufakis lands in Germany

MADRID | By Sean Duffy | Today is a massive day for the euro zone. The outcome of negotiations between Greek politicans and  European bosses will be closely monitored by markets and euro zone partners alike. With Greek banks under pressure, a deal needs to be agreed soon.


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Draghi’s D-Day

MADRID | By JP Marín ArreseThe ECB unleashed a monetary onslaught yesterday aimed at breaking the stubborn deflationary pressures and sluggish growth have shown up to now. The massive artillery barrage mercilessly pounded enemy lines  with tons of fresh money, leaving defenders no other option than  unconditional surrender. With all ammunition and reserves engaged in this breathtaking D-Day, the ECB would find itself helpless should its gamble fail. As previous landings ended in disaster, the issue now is whether this assault will work as planned. 

QE European style: €60bn monthly bond-buying until Sept 2016

MADRID | By Ana Fuentes | Amid huge market expectation, ECB’s president Mario Draghi unveiled THE operation aiming to spur growth in the eurozone: the European QE will consist of €1.1tn sovereign bonds purchases, or €60bn a month until September 2016, beginning in March. A crucial move in exchange for low risk sharing (only 20% of bonds purchased by ECB, 80% by national central banks; and Greek bonds are expected to remain out). The euro touched an intraday low of  1.1451 dollars.

“NCB risk bearing should be traded-off against a big QE”

MADRID | By Ana Fuentes | Hours before ECB’s president Mario Draghi unveils its big easing program, we spoke to think tank Bruegel central banks’ expert Silvia Merler about an eventual national risk bearing. It could be a way to make QE more acceptable by Germany, she believes, although “it should be traded-off against a significant size” (meaning more than the €50bn purchases per month some market watchers are talking about).