Eurozone money printing policy expected this week January 18, 2015 European officials are expected to announce the start of full on quantitative easing (QE) this Thursday. QE involves buying large amounts of typically sovereign assets with newly created bank reserves – cash that banks keep at the central bank. It is hoped that QE will reignite the stagnant Eurozone economy and bring inflation closer to [...]
Don’t count on cheap oil and money to stave off a new Eurozone crisis forever January 15, 2015 The Eurozone is in a vulnerable state once again. Five years ago, the euro crisis – that bête noire of the region’s economy – unfolded. Since then, much has been done to repair and strengthen the Eurozone’s architecture, ranging from the establishment of a bailout fund and the creation of a banking union, to European [...]
Eurozone industrial production beats forecasts in November January 14, 2015 There's finally some good news from the embattled Eurozone, after its factories posted a surprise increase in output. Eurozone industrial production climbed 0.2 per cent in November, defying economists' forecasts for no growth. Industrial production was just 0.4 per cent lower than a year ago, which beat economist' estimates of a 0.7 per cent decline. [...]
Risk of Greek exit from the Eurozone rises amid possible Syriza election victory, according to Moody’s January 14, 2015 "Grexit" has been resurrected as the buzzword du jour lately, amid political instability and the rise of the far left party Syriza. Now ratings agency Moody's has warned that the heightened risk of a Greek exit from the Eurozone "could have negative credit implications for other members of the European single currency". However, the risk [...]
Why a battered Eurozone is still offering tempting opportunities January 13, 2015 Hedging currency exposure will be a saving grace. The Euro had a bumpy ride economically last year, and most don’t expect 2015 to bring much respite. Anaemic growth, credit contraction and a very real fear of a deflationary spiral (the inflation rate fell to -0.2 per cent in December) are fuelling mounting expectations of QE. [...]
Eurozone QE will be the most inefficient yet – CNBC Comment January 12, 2015 THE MARKET is expecting confirmation of a QE plan from European Central Bank (ECB) president Mario Draghi very soon. Indeed, CNBC learned yesterday that the ECB will more than likely base its highly-anticipated sovereign bond buying on the size of contributions made by national central banks. But whatever form it takes, it will almost certainly [...]
Eurozone bond purchases could still disappoint January 11, 2015 ECONOMISTS warn there is still room for disappointment regarding a new European government bond purchases – or quantitative easing (QE) – despite expectations that one is guaranteed in the near future. A ruling on a 2012 emergency government bond buying programme by the European Court of Justice – due on Wednesday – could lead to [...]
Angela Merkel and Syriza are about to open Pandora’s box: Watch out, Eurozone January 11, 2015 It is not often that I feel sorry for German Chancellor Angela Merkel. Having lived in her country since 2006, for me she is the most overrated of modern politicians, having accomplished almost nothing in terms of substantive policy achievements, while somehow being lionised for her lack of ambition. She is the archetype of this [...]
Eurozone: ECB said to have discussed €500bn quantitative easing programme January 9, 2015 European Central Bank (ECB) officials are said to have discussed a €500bn quantitative easing programme, which many hope will rescue the embattled Eurozone from its economic quagmire. If the programme is launched, it will involve the central bank buying up government debt rated BBB- or higher. Purchasing only investment-grade debt minimises the bank's exposure to [...]
Eurozone confidence remains weak January 8, 2015 THE EUROZONE’s economic sentiment indicator remained unchanged at 100.7 for the third consecutive month, according to figures released yesterday by the European Commission (EC). “December’s EC business and consumer survey did little to alter the picture of weak Eurozone GDP growth at the end of 2014,” said Jessica Hinds of Capital Economics.