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ECB QE Monitor – December 7, 2015

The ECB started its QE on March 9 (decision to purchase €60 bn of assets per month until Sept. 2016) and decided on December 3 to extend it (until March 2017). For the time being, the Eurosystem has already purchased € 559.3 bn of assets, including € 461.9 bn under the Public Sector Purchase Programme (PSPP), and still has to buy € 940.7 bn of assets until March 2017.

Key points for this month:

  • The pace Eurosystem’s purchases accelerated strongly at the end of November (considering the pace of weekly purchases) as the Eurosystem decided to front-load its asset purchases before December.
  • In November, the Eurosystem bought sovereign bonds on slightly longer maturities for Spain and approximately on the same maturities for the other countries.
  • In November, the stock of bonds purchased under the SMP declined by €2.4 bn.
  • In effective terms, the euro remained relatively stable in effective terms (depreciation before the governing council and appreciation afterwards).
  • Core countries’ yields rose in November after the ECB’s governing council. Peripheral spreads tightened slightly in November.
  • Long-term inflation expectations (inflation swap forward 5y. in 5y. and 10y. inflation break-even rates) fell slightly in October.
  • Credit spreads remained roughly unchanged in November.
  • Eurozone Equity indices fell after the ECB’s governing council but remain above early-2015 levels.
  • Volatility and financial stress declined in October after the rise of this summer.
  • No substantial expansion of loans to non-financial corporations while there is some improvement for loans to households, particularly in Italy (last figures: October). Interest rates on new loans to SMEs fell marginally in Germany and in Spain (last figures: October).
  • Business climate fell slightly while consumer confidence indicators have risen marginally in November.




























Four important dates to have in mind

  • June 5, 2014: Mario Draghi announces the ECB wants to expand its balance sheet to the 2012 level. Negative deposit rates and the launch of a TLTRO programme are also announced.
  • January 22, 2015: the ECB decides to launch an expanded asset purchase program (sovereign QE).
  • March 9, 2015: the expanded APP turns effective. The ECB starts buying sovereign bonds.
  • December 3, 2015: the ECB announces that the QE is extended until March 2017 and that the PSPP is extended to local and regional governments’ debt securities. Maturing assets held by the Eurosystem will be reinvested “as long as necessary”. The deposit rate is cut to -0.30%.


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ITHURBIDE Philippe , Global Head of Research
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ECB QE Monitor – December 7, 2015
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