Euro Strengthens After ECB Expands Bond-Buying
Comment of the Day

June 04 2020

Commentary by Eoin Treacy

Euro Strengthens After ECB Expands Bond-Buying

This article by Alyce Andres for Bloomberg may be of interest to subscribers. Here is a section:

CB, by broad consensus, voted to expand PEPP purchases by 600 billion euros ($675 billion) to 1,350 billion euros, extend program until at least mid-2021, and extend principal maturities until end-2022

Expansion of the “very controversial” program suggests that the ECB is determined to stabilize peripheral spreads and is indifferent to court challenges, a change from ECB President Christine Lagarde’s posture in January, according to a message from Bipan Rai, North American head of foreign exchange strategy at CIBC

Eoin Treacy's view

Investors are increasingly of the opinion that Europe is going to finally address some of its internal contradictions. The lengthy period of austerity imposed on peripheral nations killed growth, threatened deflation, sparked populist protest movements and endangered the sustainability of the Eurozone project. It is now over.

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