Understanding the ECB’s Quantitive Easing Program – What We Might Expect At the March Meeting

When the ECB introduced its quantitative easing programme, one of its primary aims was to stimulate lending — and in turn encourage more investment in downtrodden European economies. Without a revival in corporate spending, Europe is at risk of entering a vicious cycle where low economic growth begets weak corporate investment, which then begets weak productivity and lower growth. QE appears to have lowered the cost of borrowing for smaller businesses and helped spur demand for lending from companies while senior European business leaders highlight the challenges facing the ECB as it seeks to create an environment where confidence and ready access to capital can spur investment. ECB President Mario Draghi said that the Eurozone might face three emergencies so that Europe had to make corresponding plans. Large scale QE measures by the ECB have stimulated the EU economy. Boosted by falling global oil prices and devalued euro, the EU economy has begun to see improvement. The EU economy is expecting a relatively low growth rate as the manufacturing index rises, the stock market rallies, some capital flows back to Europe and export activities expand. The QE injected a lot of liquidity into the euro market and lowered the euro’s exchange rate. The question is how long can the euro remain weak. The low euro is seeing foreign investments climb sending the housing market in a spiral while unemployment remains high. Even increased tourism isn’t helping the Eurozone in its recovery. What can we expect in the equity and currency markets in the next few months?

Barry Norman
The Director of Investors Trading Academy as well as a published author and educator. Barry brings with him over 35 years of financial market knowledge and experience. He holds an MBA in Finance and Economics from UCLA and an undergraduate degree in Economics from the University of Maryland. Barry was award the title of “Best Education in Europe” by Global Banking & Finance. Barry is also a presenter for the MoneyShow and many well-known news sources.