8 Apr 2015
ECB likely to extend easing beyond 2016 – SG
FXStreet (Barcelona) - ECB might extend its purchases beyond 2016 and even include corporate bonds, if the inflation outlook fails to improve, according to Societe Generale.
Key Quotes
“The eurozone is enjoying the tailwinds from cheap oil, a weak euro, improving financial conditions, and looser fiscal policy. But, given the still-significant need for deleveraging and reform, these short-term tailwinds may not result in a self-sustained recovery.”
“Consequently, our economists expect ECB asset purchases to continue beyond September 2016 if the inflation outlook does not improve.”
“In their baseline scenario, they expect the ECB to also add corporate bonds to its asset purchases in 2016 (to support the supply of assets), and extend QE and the TLTRO programme by around one year to mid-2017 (adding an additional €600bn to its balance sheet).”
Key Quotes
“The eurozone is enjoying the tailwinds from cheap oil, a weak euro, improving financial conditions, and looser fiscal policy. But, given the still-significant need for deleveraging and reform, these short-term tailwinds may not result in a self-sustained recovery.”
“Consequently, our economists expect ECB asset purchases to continue beyond September 2016 if the inflation outlook does not improve.”
“In their baseline scenario, they expect the ECB to also add corporate bonds to its asset purchases in 2016 (to support the supply of assets), and extend QE and the TLTRO programme by around one year to mid-2017 (adding an additional €600bn to its balance sheet).”