ECB to start printing money

While it was expected, the decision of the European Central Bank (ECB) to start printing money has led to a wave of optimism on the European and global capital markets. The decision was welcomed by the International Monetary Fund (IMF) and European political leaders, but most comments include warnings that this in itself will not be enough to tackle the challenges facing the real economy.

Market enthusiasm expected blow to the euro

After announcing the decision on Thursday all major markets Europe grew and the trend stays on Friday. Shares rose and the stock exchanges in emerging economies such as Hungary, Poland, Romania and Turkey. Optimism and carry markets in Asia and North America, which also took to the green. Yields on German government bonds with maturities of 10 and 30 years, respectively, fell to 0.317% and 0.97%, while the main index of the Frankfurt Stock Exchange DAX reached a new historical record. Spain and Italy also enjoy reduced financing costs, as yields on their ten-year bonds fell respectively to 1.297% and 1.459%. Investors increased demand for government securities from the UK, Scandinavia and the US, the yield on US 10-year bond dropped to 1.7820 percent.

The application that the March ECB will begin to pour 60 billion. Euros each month in the financial markets of the euro area led to the expected collapse of the single currency to 11-year lows. During Friday trading the euro fell to 1.1229 dollars, its lowest level since August 2003 The single currency depreciated for six consecutive weeks, which last happened in mid-2010, analysts from Morgan Stanley lowered its forecast Course of the single currency, now expect it to be $ 1.05 at the end of the year. Depreciation of the euro is the main effect that the ECB aims to printing money. Weak currency makes imported goods, which supports inflation, while manufactured goods made in the euro area more attractive for export, which should stimulate production.