Candriam: the ECB has not disappointed

“The ECB has not disappointed. As expected Mario Draghi extended its monetary stimulus programme by 9 months while reducing the monthly level by 20 billion. After having bought close to 900 billion worth of bonds in 2016, the ECB now “only” has to buy 780 billion in 2017. The announcement was well received by risky-asset markets, especially since the president of the ECB announced the loosening of certain purchasing conditions which led in turn to a strong steepening of the yield curve and a strong performance of European banks.

Mission accomplished, one might say, although the Italian bank sector remains a source of concern. Behind all the good news we still note that long-term interest rates still continue to rise and that this will be watched closely in a context of rising European debt.”