ECB Expected To Increase Support

ECB Expected To Increase Support

over 3 years ago2 mins

The European Central Bank (ECB) can’t exactly lay eyes on its new enemy, but the support it’s expected to announce on Thursday should help the eurozone keep swinging anyway 🥊

What does this mean?

The ECB started its $840 billion bond-buying program back in March, with the aim of cushioning the economic blow of the coronavirus pandemic on eurozone countries 💶 And since it’s only spent a third of that earmarked money so far, it might seem unnecessary to increase that pot by, say, $560 billion. But according to Bloomberg, that’s exactly what most investors are expecting the ECB to do – and if it doesn’t, there could be a sharp sell-off of the region’s assets.

Daily Brief Image

Those investors probably just like the idea of a safety net 🤔 Just look at the US, which previously promised unlimited bond-buying: the Federal Reserve (the Fed) hasn’t bought a single bond as part of the program, but just the talk of it seems to have been enough to keep investors from panic-selling and inspire companies to issue their own new bonds.

Daily Brief Image

Why should I care?

The Fed – which is still hashing out the finer details of its bottomless bond-buying – hasn’t actually launched the initiative yet, but some analysts aren’t sure markets actually need its extra support anymore 📈 In any case, companies might be reluctant to take its help for fear of looking needy while rebounding markets as a whole look strong. Equally, they may snap up the offer just in case they need some cash for a rainy – or, er, COVIDy – day.

Daily Brief Image

The Bank of England this week warned the country’s commercial banks to prepare for the UK to leave the European Union (EU) without a long-hoped-for trade deal 🇪🇺 This week’s negotiations between the two haven’t shown much progress, which makes it all the more likely British banks will lose their easy access to Europe’s financial markets.

Daily Brief Image
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG