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The EU needs nothing short of Sovereign QE – FXStreet

FXStreet (Barcelona) - FXStreet Editor and Analyst Omkar Godbole highlights that the European Central Bank (ECB) has no other option but to undertake a full blown sovereign style QE program because of the surprise expansion of massive stimulus spending by Bank of Japan on Oct. 31.

Key Quotes

“The timely expansion of stimulus operation by Bank of Japan has left ECB with no other option than a sovereign QE.”

“The EUR/JPY pair is likely to be bought on dips so long as the ECB stays relatively hawkish compared to the Bank of Japan.”

“Eurozone needs a sovereign QE in order to beat the deflationary impact of a weaker Yen.”

EUR/GBP consolidates below 0.7850

EUR/GBP is falling modestly on Tuesday ahead of a busty Wednesday in the United Kingdom.
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Bond Yields in EU decline

The benchmark bond yields in the core Eurozone nations as well as most of the periphery nations declined after European central Bank (ECB) member Yves Mersch said officials will extend their stimulus program by purchasing asset-backed securities.
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