Eurozone borrowing costs dived to record lows, the euro fell and shares were pushed higher yesterday in a “textbook reaction” to the European Central Bank’s landmark €1.1 trillion stimulus package.
Although prices moved favourably as traders cheered the bigger-than-expected move and the open-ended promise that more still would be done if necessary, many remained sceptical that the money-creation splurge would be enough to pull the 19-nation eurozone out of its economic paralysis.
Nick Kounis, an ABN Amro economist, said: “We expect the ECB’s quantitative easing programme to lift growth and inflation significantly, and it is therefore well worth doing, but we should not expect miracles.”
German ten-year bund yields, which set the standard for eurozone borrowing costs, hit a new low of 0.377 per cent,