ANALYSIS: ECB acts but Japan lesson looms large
While EU leaders unveiled plans for a new €321m state-of-the-art ‘Europa’ Brussels HQ, over in Frankfurt the ECB was building its own foundations for change.
Mario Draghi
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ECB gives a silent warning to bond investors
The ECB Governing Council again left monetary policy unchanged when it met on Thursday. It looks like the ECB is buying time to communicate to markets that it’s going to wind down its bond buying programme, albeit in an orderly fashion.
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The ECB’s corporate bond buying – a double-edged sword
The decision by the ECB to include investment-grade corporate bonds in its asset purchasing programme has led to a spike in issuance and to yields edging even lower. While this market response was anticipated by the central bank, its stimulus efforts threaten the viability of the asset class in the longer term .
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Yellen’s iron grip makes her peers look feeble
Janet Yellen’s Economic Club of New York speech provided a timely reminder that the Fed continues to dictate markets. This contrasts with the waning credibility of her counterparts in Europe and Japan.
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Was this Draghi’s final bullet?
The ECB’s latest salvo in the fight against the prospect of deflation was initially met positively by markets. But, a lack of a clear message that the Bank will cut rates further from here sent markets falling again almost as quickly.
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Decoding the ECB ‘disappointment’
ECB President Mario Draghi disappointed markets on Thursday. While the Bank delivered a 10 basis point cut to the deposit rate to an historic -0.3%, and extended the deadline of its asset purchase programme by six months, it kept the main refinancing and marginal lending rates steady at 5 and 30 basis points respectively.
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Time to forget about ‘safe havens’?
The events of recent weeks could lead investors to draw a stark conclusion; there is no such thing as a ‘safe haven’ in investment terms any more.
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Preparing for the storm
Relentless easy monetary policies and short term rates at virtually have kept market volatilities at remarkably low levels. Preparing for the next spike may not be such a bad idea as the effects of central banking measures start to wane.
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Government bonds did fund managers
Even French 10-year bond yields are trading below 1% now. Did fund managers see that coming, or were they caught by surprise?
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ECB QE why
The ECB is unlikely to start buying European government bonds, as yields are already at record-low levels, says Stephen Jones, chief investment officer of Kames Capital.