ECB’s Nowotny say there’s been no decision on ECB corporate bond buying

• Corp bonds is one of the markets that are still an option to grow balance sheet
• Open questions remain on program
• There has been no discussion and no decision in the governing council
• ECB shouldn’t be too activist on monetary policy
• ECB has no present need for QE legal assessment
• Inflation expectations remain “quite obviously” still anchored (Yes, they are “quite obviously” at or close to the 2% target

  

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• Would support QE on risk of long-lasting deflation
• Sees inflation rising next year
• Rising wage levels in Germany good for Europe
• Euro is irreversible

The QE talk has nudged EUR/USD lower to 1.2652. Reuters had a headline saying that the ECB were at the juncture for QE but left of the “not” part after “were” and that helped to shake the euro lower too. That’s been corrected and we’ve bounced to 1.2663