ECB Papers Over Rift with Rate Cuts but Holds Back on Meaningful QE

Central bank launches radical plan to drive down the euro, but won’t make any difference, warn analysts

by Ambrose Evans-Pritchard
Telegraph.co.uk

The European Central Bank has cut interest rates far below zero in a radical attempt to drive down the euro and vowed a blitz of private bond purchases to lift the eurozone out of its slump, but stopped short of fully fledged quantitative easing to avoid a conflict with Germany.

Stock markets surged across southern Europe, with Italy’s MIB index up 2.8pc and Spain’s IBEX up 2pc. Yields on 10-year Spanish bonds fell to a historic low of 2.15pc as euphoric investors scrambled to buy debt across the EMU periphery.

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