25
Jun
European recovery plan could also bolster the euro
ECB injects EUR 1,350 billion. Banks borrow EUR 1,300 billion at negative yields. Debt pooling and monetisation are moving forward. Recovery plan favourable to the euro.
Key points
- ECB is on every front
- ECB lends banks an additional 1,300 billion at negative yields
- ECB underwrites the fiscal expansion of European states
- An 1,800 billion recovery plan with a historical political profile
- Monetisation of public deficits, inflation and real yields
- Risks of a steepening ECB-controlled yield curve
- The euro may well benefit from the European recovery plan
- Equities relatively more attractive in Europe
