ECB faces challenges to avoid disappointing us - SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that the day’s big event is the ECB meeting and the market expects the bond-purchasing programme to be extended, and is braced for some expansion of the pool of bonds the ECB can buy.

Key Quotes

“We tend to think that increasing the share of each issue the ECB can buy (to 50%) is preferable to lowering the yields they are prepared to buy at and both are preferable to messing around with the ‘capital key’ which determines the ratio of each country’s bonds they buy. But we wouldn’t rule out an imaginative solution either. The danger, in markets, is that they do nothing at this meeting. I don’t for a second suppose that would get the Euro up and out of its claustrophobic range, but it would be supportive.”