ECB QE won’t ease European stock investors’ fears – CIBC
Katherine Judge and Avery Shenfeld, analysts at CIBC, explained that during 2015, when the European Central Bank launched a QE program, equity prices rose but the rally was short-lived. They see that economic indicators need to improve in order to see stocks higher.
Key Quotes:
“Less than a year after the ECB announced it was closing the books on QE that started in 2015, policymakers are preparing to re-start a bond-buying program. ECB President Draghi cited deteriorating economic data in Europe as resulting in a “worse and worse” outlook for the region. While QE lifted stocks when it was first announced in 2015, there likely won’t be a repeat this time around. Real GDP growth was on more solid footing at that time, but has disappointed lately”
“The impact from QE on stocks in 2015 was reversed in a matter of months. Rather than a quick bounce from a QE announcement, eurozone equity gains will have to await better news from actual growth indicators.”
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
