27 November 2014

Bloomberg: Euro area confidence unexpectedly increases as ECB mulls action

An index of executive and household confidence rose to 100.8 from 100.7 in October, the highest since July, the European Commission in Brussels said today. Economists forecast a decline to 100.3, according to the median of 28 estimate in a Bloomberg survey.

The report comes a week before the ECB’s monthly policy meeting at which officials will present revised economic forecasts. President Mario Draghi has said inflation needs to be boosted “as fast as possible” and explicitly cited government bond buying as a potential tool. He has ordered staff to produce a range of asset-buying options beyond the purchases of securitized debt already under way. 

Lower ECB forecasts would increase “the likelihood that there could be some promise of additional action at the next meeting,” said Richard McGuire, head of European rates strategy at Rabobank International in London. “It’s probably a little bit premature to consider that that would include QE but certainly either some indication that QE is in the offing or a more official recognition that government bond purchasing is possible.”

Full article on Bloomberg

© Bloomberg