LOIM’s Gregor Macintosh comments on ECB rates
While Draghi continues to show his progressive intent, the specific economic impact of the measures he has announced is likely to have less impact than will be delivered by the Euro’s reaction to his policy initiatives.
The limits of the EU policy framework have so far tied Draghi’s hands from delivering full-scale QE, let alone encourage fiscal easing. However, the steepening of the European yield curve, strong rally in peripheral debt and equities suggest investors are initially encouraged about the reflationary impulse of the Euro’s depreciation.
Gregor Macintosh is head of Sovereign, Emerging Debt and FX at Lombard Odier Investment Managers