ECB: QE open-ended but too small to change economic outlook – ABN AMRO

Nick Kounis, head of financial markets research at ABN AMRO, suggests that the ECB announcements were broadly in line with expectations in terms of rate cuts (a 10bp reduction in the deposit rate and a signal of more to come) and mitigating measures for banks (more generous TLTRO conditions and a tiered deposit rate system).

Key Quotes

“The restart of net asset purchases was a mixed bag, as the size was relatively modest (EUR 20bn per month), but the programme is open-ended for the first time since the ECB launched the APP.  The ECB said the programme would last as ‘long as necessary’.”

“Despite the open-ended nature of the programme, the size of the QE programme is very small and, as such, the macroeconomic impact of these measures will be relatively modest. As such we doubt whether this package of measures will be sufficient to raise inflation significantly over the next 2-3 years. Given this, and the modest pace of net asset purchases, QE will likely last for the foreseeable future, and a step up in the pace looks likely at some point.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD extends its decline amid upbeat US consumer confidence

EUR/USD is extending its falls toward 1.1050 after US Consumer Sentiment beat expectations with 92 points. Earlier, retail sales met expectations. 


GBP/USD rises above 1.24 as Brexit uncertainty prevails

GBP/USD hits a 6-week high above 1.24. The DUP dismissed reports that it would accept special treatment for the province as a solution to the backstop. The EU is ready to grant a Brexit extension as Johnson faces growing criticism.


USD/JPY: holding in higher ground ahead of US Retail Sales

Risk appetite dominates the financial world, weighing on safe-haven assets. US Retail Sales and the preliminary Michigan Consumer Sentiment Index up next. USD/JPY bullish case prevails, 107.45 critical Fibonacci support.


Gold remains on track to end week below $1,500

The troy ounce of the precious metal rose above $1,500 but failed to preserve its strength as the upbeat market sentiment made it difficult for the safe-haven gold to find demand. 

Gold News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more