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ECB signaling they are not yet done with easing - Yves Kuhn

FXStreet (Łódź) - Yves Kuhn, chief investment officer at Banque Internationale à Luxembourg, comments on ECB's decision today to cut rates and introduce ABS purchases.

Key quotes


"Clearly, the ECB is signaling they are not yet done with easing."

"It is worthwhile noting that the doves seem to have won in the committee, as Draghi mentioned that this was not an unanimous decision."

"What is key is the size of the programme; currently there may be 760bn in ABS outstanding, however this market has shrunk by over 40% since 2010."

"Furthermore, the current EU capital allocation key would imply that most of the spending would go to German and French asset backed securities and it would not necessarily be focused on the periphery."

"As Draghi said, this makes it all very complex. He stated that ‘it is very difficult to assess the size’ of the programme."

"Probably in anticipation of this, the rally in bonds, the depreciation of the EUR and the tightening of spreads have overshot in the short term."

"However the commitment to ABS purchases is real, and the market eagerly awaits any further details."

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