pondelok 24. novembra 2014

ECB sovereign bond purchases are unlikely to happen for a long time

ECB sovereign bond purchases are unlikely to happen for a long time, perhaps never. President Draghi has emphasised "unanimous commitment to using additional unconventional instruments within its mandate". But the powerful German contingent of the Governing Board -- Jens Weidmann -- is still making very public its opposition. The latest salvo from Weidmann suggests additional measures to tackle low inflation could encounter legal limits [ID:nL6N0TE2WM]. Draghi ratcheted up the rhetoric last week saying "we will do what we must to raise inflation and inflation expectations as fast as possible". Credit Suisse has said ECB QE could come in Dec. But if QE was imminent, then the ECB wouldn't still be offering TLTROs, the next one in Dec, or floating trial balloons of corporate bond purchases. Draghi is probably hoping his success at pushing down the EUR and euro govt bond yields will last until the Fed starts to raise rates. Pratima.Desai@ThomsonReuters.com