The ECB meets on Thursday, it will discuss the details of
its new bond purchasing programme. For some, the new plan marks the final end
of the Bundesbank doctrine; for others, it is a necessary evil to calm the
crisis. It is obvious to us that Mario Draghi’s congeniality and some vague
words alone will not have the same calming effect as in August. In our view,
the ECB might eventually present targets for short-term bond yields linked to
the refi rate.
However, not all the detail might be revealed this week,
perhaps because there is not yet full agreement within the Governing Council,
but maybe also to keep pressure on peripheral governments.
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