The ECB imply rates lower for longer
The markets continue in their current state of uncertainty with few participants wanting to take significant overnight or new investment risk. The fading of our market yesterday and the US markets (although to a much lesser degree) overnight illustrates this risk aversion. Overnight the European Central Bank (ECB) joined the economic pessimism party. However, while announcing reduced economic growth forecasts Mario Draghi, on his 68th birthday, also opened the door for further Quantitative Easing (QE). We now have an interesting conundrum, if the ECB is considering further QE when will the US Fed be prepared to raise interest rates as flagged? Patience and the ability to keep the position of the market in perspective remains key right now. (VIEW LINK)
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