Thoughts on the ECB's QE
The European Central Bank's (ECB) announcement appears largely designed to further weaken the euro. The ECB aims to add €1.1 trillion in assets, and possibly more, thereby returning the balance sheet to its 2012 high. The program could well be extended, should inflation fail to rise towards the de facto 2% target.
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Policy makers typically suggest QE is primarily aimed at strengthening domestic demand. The evidence, however, is mixed and instead the impact of QE on exchange rates seems by far more pronounced. (December 2014)
Over the last 12 months, core European government bond yields tumbled from over 2% to below 1%, while European peripheral yields declined by even more. This brief paper provides some perspective on these watershed shifts in valuation, their probable causes, as well as what's likely to come next. (October 2014)
Prudential Fixed Income to manage new $666.5 million CLO, September 3, 2014Read More