Investors bought peripheral government bond in anticipation of QE program, asset purchase program, will be initiated by European central bank (ECB). However latest Europe economy data has shown that economy has expanded by just 0.2% lead by 0.8% Germany expansion.
Many investors now expects that ECB to lower the interest rate and launch the long term refinancing operations (LTRO) rather than starting an asset purchase scheme at its June meeting, Euro slips as periphery bond yields rise.
Many investors now expects that ECB to lower the interest rate and launch the long term refinancing operations (LTRO) rather than starting an asset purchase scheme at its June meeting, Euro slips as periphery bond yields rise.
These speculations prompted a sell-off this week in peripheral bond markets, sending yields higher. ECB already has zero deposit rates and inflation around 0.7% that is less than half of its 2%long run target. Top short term priority of ECB is to avoid deflation, ECB: An appropriate monetary policy.
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