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30 Dec 2014
Greece making QER tricky - RBS
FXStreet (Guatemala) - Analysts at RBS suggested that the Greek elections make the QE question very tricky.
Key Quotes:
“ If anything risks delay to the QE program only as some on the council may wish to wait and see, and not feed into the moral hazard present in a pre-election decision”.
“Of course, ideally the ECB should not care about political noise, they should react to threats to their mandate, such as Spanish CPI at -1.1% y/y as reported this morning”.
“But on this front one could argue they should have already acted more aggressively, or at least less incrementally. Even beyond the question of if and when on QE, this is a reminder that the patience of a populace with massive youth unemployment is not infinite, though perhaps Greece (and others) can still get past 2015 on this front”.
“It is a rising risk though – the political one. And one that circles back to ECB QE once again: even if we get a big program which adds to the global liquidity flood, will it create growth that leads to jobs?”.
Key Quotes:
“ If anything risks delay to the QE program only as some on the council may wish to wait and see, and not feed into the moral hazard present in a pre-election decision”.
“Of course, ideally the ECB should not care about political noise, they should react to threats to their mandate, such as Spanish CPI at -1.1% y/y as reported this morning”.
“But on this front one could argue they should have already acted more aggressively, or at least less incrementally. Even beyond the question of if and when on QE, this is a reminder that the patience of a populace with massive youth unemployment is not infinite, though perhaps Greece (and others) can still get past 2015 on this front”.
“It is a rising risk though – the political one. And one that circles back to ECB QE once again: even if we get a big program which adds to the global liquidity flood, will it create growth that leads to jobs?”.