Economics
Confusion Reigns in Markets as ECB QE Changes Spark Wild Swings
- German 10-year bund yield climbs to highest since January
- Euro slides as ECB says it can increase buying if needed
ECB Extending QE Program at Slower Pace
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As the European Central Bank laid out its revamped asset-purchase program, different investors seized upon different parts -- leaving the overwhelming result one of market confusion.
For bond bears, the reduction in pace of the ECB’s monthly purchases to 60 billion euros gave the first hints of a future without quantitative easing. For the bulls, the lifting of the deposit rate floor and drop in the lower-maturity bound for buying brought a raft of new securities into the central bank’s shopping basket. Currency traders also initially focused on the reduction of monthly purchases, before zeroing in on the longer-than-expected extension.