Analysts word “surprise” on Thursday by the descriptions of the all cases. Because as far as the European Bank for Centalny at a meeting in January left interest rates unchanged, as they expected, all eyes were on Frankfurt in anticipation of the announcement of quantitative easing. Investors did not disappoint this time on Mario Draghim, President of the ECB. Because the bank decided that from March of this year to the end of September 2016. Will be bought up bonds (including government) for 60 billion a month.
Yet the media Wednesday citing unofficial information stated that the purchase of assets will have a monthly value of 50 billion.
Euro still on the defensive
The announcement sparked considerable run volatility. However, after a conference, the head of the ECB, the situation began to stabilize.
– The ECB’s decision exceeded analysts’ expectations. Impact, at least in the short term, it will be clearly positive for the zloty exchange and bonds. We believe that the profitability of Polish 10-year government bond yields fall to 2 percent. – Says Marcin Mazurek, an economist at mBank.
Krystian Jaworski with Credit Agricole indicates that positive impulses for the zloty in the European QE should be maintained as long as the central bank bought these bonds will be.
– Direct market reaction showed right away that this was a surprise. Euro weakened markedly, and EUR / USD pair has been about breaking the 1.15 level. More money will now flowed into emerging markets. Gold gets a long-term strengthening of doping, although it will not be jumping – says the economist.
Experts have no doubt that started on Thursday, a gradual increase in the supply of Money should lead to a weakening of the European currency, the decline in bond yields, as well as the growth of stock indices.
Marta Petka-Zagajewska with Raiffeisen Polbank believes that the euro will remain in this year’s relatively weak currency.
– Despite the expectations aroused European bankers were able to surprise market participants. Weakness of the euro can be seen on all currency pairs in both the US dollar and the Swiss franc and gold. At the end of the year, we expect the EUR / USD exchange rate of 1.1. Euro remains weak this year, not only because of the ECB, but also the risks associated with Greece and the crisis in the East – says Marta Petka-Zagajewska, chief economist of the bank.
Injection to strengthen
Analysts suggest that in addition to the financial markets, it can also – according to the intention of the ECB – the euro zone economy gain.
– This is at least 1 trillion euros, which will go into the economy. At least, he probably will be continued also after September 2016. Research shows that in the US all the QE programs positively influenced the economy – says Krystian Jaworski.
In his view, the problem may be that the US economy is homogeneous, and the problems of the euro area are varied depending on the country concerned.
Mario Draghi also indicated that announced by the ECB actions should contribute to the increase in inflation expectations. Deflation in December came to the euro area and the central bank seems to be determined to fight it. Economists believe that if you persevere in this determination, it will mean that quantitative easing will last longer.
– Looking at the forecast inflation, and its QE will not change significantly, the ECB rather not say the last word on the subject quantitative easing – emphasizes Grzegorz Maliszewski, chief economist at Bank Millennium.
Not everyone received the decision of the ECB with such joy as market players. His skepticism as to its impact on the outlook for the Eurozone economy did not hide his Vice-President of the European Commission (EC).
– The ECB may by means of quantitative easing to buy time, but it will not solve the structural problems – commented on the decision Valdis Dombrovskis, deputy head of the European Commission for. the euro and social dialogue.
Also, German Chancellor optimism calmed speak at the World Economic Forum in Davos.
– This is what the ECB decided to stimulate economic development, does not exempt European politicians with responsibility for reforming the economies of their countries – Angela Merkel said.
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