Sell Side View: Peter Quinton, Bell Potter, discusses potential the impacts of any Quantitative Easing by the European Central Bank (ECB)
Sell Side View: Peter Quinton, Bell Potter, discusses potential the impacts of any Quantitative Easing by the European Central Bank (ECB). The pace of economic recovery is too slow and inflation is far too low in the Eurozone. Against this backdrop, the ECB is now considering non-conventional monetary policy options such as Quantitative Easing to further relax financial conditions. We expect the ECB to turn to Quantitative Easing of around €1,000 billion, equivalent to 10% of the Eurozone's gross domestic product, in the second half of calendar 2014. Any Quantitative Easing by the ECB would probably result in an accompanying share market gain of around 15%. To put all of this into the proper context, the European share market accounts for a fairly hefty 25% of the global share market so it would make a meaningful direct contribution to futher gains in the global share market.