Investment Clock insights

ECB dovish taper

Ian Kernohan

8 December 2016

The European Central Bank (ECB) have extended their programme of Quantitative Easing (QE) purchases at a lower monthly rate from March next year, but for a longer time period than expected, and with the option of extending beyond this timescale if necessary. While recent data suggests that the eurozone economy is still very much in a growth mode, low inflation, fading support from cheaper energy, and rising political uncertainty suggest that the ECB should retain a dovish bias well into next year. This fits with our US Federal Reserve "lone hiker" scenario for 2017.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.