This afternoon’s European Central Bank meeting briefly took attention away from the European Council Summit in Brussels today. In its last monetary policy statement of the year the European monetary authority confirmed that net asset purchases would end, as planned, ahead of 2019. To the detriment of the Euro, ECB President Draghi confirmed that quantitative easing remained within the central bank’s quiver. The asset purchase plan was the physical manifestation of the economist’s claim to do whatever it takes to save the Eurozone economy. However, from three simple words has come a stockpile of 2.6 trillion Euros worth of corporate and sovereign debt settled within secondary markets in order to stabilise soaring costs of debt that were stifling the Eurozone economy. Worth over a trillion US Dollars in debt each, the ECB has estimated that the emergency spending plan has shaved some 14% off of the value of a Euro in the past years since its announcement and employment. As Theresa May arrived in Brussels for the two-day summit Sterling investors kept a wary eye out. Sterling lost some value as a downbeat Prime Minister conceded that she was not expecting concessions to flow anytime soon. However, perseverance and optimistic news reports kept the Pound in positive territory on the day following the successful defence of her premiership.
Discussion and Analysis by Charles Porter