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Here’s how bond markets could react to the ECB next week

“In contrast, 40 billion euros per month is far more likely to require a further taper,” read the note” writes unknown author for cnbc.com. “For example, 20 billion euros per month would imply that QE could immediately end once the extension is complete.European Central Bank President Mario Draghi will return to the spotlight next Thursday with the focus firmly on how he plans to trim the bank’s asset purchase policy.Its findings, claimed to be broadly consistent with that of Reuters, suggested that the most market neutral scenarios are either an additional 20 billion euros for 12 months, 30 billion euros for nine months or 40 billion euros for six months.Citi concluded that the neutral level of quantitative easing (QE) that the ECB could introduce while maintaining market calm was around 250 billion euros.
 
Source: cnbc.com



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