mercredi 25 mars 2015
Nine Consequences of Europe's QE
Posted on 14:37 by nice news
This week’s encouraging data from Europe, including the decent euro zone Purchasing Managers Index numbers for February released yesterday, confirm that the continent is on a well-trodden quantitative-easing path that has already been followed in the U.S. and Japan. With this in mind, here are nine things to know about the European Central Bank’s QE, ranging from what has already occurred to what is likely to take place.
Expectations of QE, especially when reinforced with official confirmation of policy intentions, lead to out-performance by equities and currency depreciation. That is what happened, in sequence: first in the U.S., after the Federal Reserve's 2010 announcement of a second round of asset purchases and the subsequent rounds of QE; then in Japan, once the central bank shifted to a more stimulative QE stance under its new governor, Haruhiko Kuroda, in 2013; and most recently, it has been taking place in Europe since ECB President Mario Draghi signaled his QE intentions last year.
The financial markets' reaction provides an immediate shot in the arm to sentiment, illustrated by encouraging upward movement in closely followed survey-based indicators, such as consumer confidence. Initially, both the corporate segment and households tend to respond enthusiastically to central banks that are seen as more engaged in stimulating economic activity.
Some of this sentiment impro
Expectations of QE, especially when reinforced with official confirmation of policy intentions, lead to out-performance by equities and currency depreciation. That is what happened, in sequence: first in the U.S., after the Federal Reserve's 2010 announcement of a second round of asset purchases and the subsequent rounds of QE; then in Japan, once the central bank shifted to a more stimulative QE stance under its new governor, Haruhiko Kuroda, in 2013; and most recently, it has been taking place in Europe since ECB President Mario Draghi signaled his QE intentions last year.
The financial markets' reaction provides an immediate shot in the arm to sentiment, illustrated by encouraging upward movement in closely followed survey-based indicators, such as consumer confidence. Initially, both the corporate segment and households tend to respond enthusiastically to central banks that are seen as more engaged in stimulating economic activity.
Some of this sentiment impro
Nine Consequences of Europe's QE
Categories: Nine Consequences of Europes QE
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