A Rumour About QE Is Igniting European Markets

Mario Draghi
Mario Draghi, President of the European Central Bank (ECB). REUTERS/Kai Pfaffenbach

European markets are reacting to rumours that the European Central Bank is planning a bigger program of asset purchases to boost the bloc’s lackluster economy.

Here’s the scorecard right now:

France’s CAC 40 is up 1.34%

Spain’s IBEX is down 1.39%

Italy’s FTSE MIB is up 2.161%

Germany’s DAX is up 1.01%

Reuters reported that the ECB is considering a much wider purchase of corporate bonds as soon as December. Currently the bank is buying some asset-backed securities and corporate, but there is a much smaller market for those purchases, as shown by Frederik Ducrozet at Credit Agricole.

The euro fell more by nearly a cent against the dollar, before rebounding as the rumour was dismissed by other news organisations:

Eur USD

The report lifted equities too, all of the eurozone’s major indices are up by more than 1% so far today, but are now dipping a little.

The ECB is denying that there is anything like this on the agenda, and the Financial Times is reporting from sources that corporate bond purchases are not on December’s agenda — at least not yet.

Here’s Italy’s FTSE MIB climbing and dropping again:

FTSE MIB