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.
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