Weak currency, low rates and energy prices spur stilted eurozone recovery
But economists fear a sudden yield lurch and concurrent fall in bond prices could cause a slide in equities
London
EURO depreciation, ultra-low interest rates and a decline in energy costs have enabled stressed eurozone economies to begin a stilted recovery.
Indeed, the markets have already carried out the work of the European Central Bank (ECB) before its 1.1 trillion euro (S$1.7 trillion) quantitative easing (QE) begins this month. It brings back memories of ECB president Mario Draghi's mid-2012 jawboning when he set bond and equity markets alight with his promise that he would do "whatever it takes" to protect the euro. Similarly, expectations of QE have boosted bonds and equities, but at least this time economies of the weaker "Club Med" eurozone nations have begun to bottom out, with Ireland performing best.
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
US inflation rises in line with expectations in March
Thames water crisis risks £100 billion UK investment plan
Indian central bank issues draft guidelines for web aggregators of loan products
Vietnam National Assembly head resigns amid graft purge
China central bank flags bond investment risks to some financial institutions: sources
Xi tells Blinken US, China should be 'partners, not rivals'