The Weekly Brief (14 March 2016)Contributor Global Markets Insights Strategy Team
The European Central Bank (ECB) unveiled several significant measures to support the eurozone economy and push up inflation.
Attacking on all fronts, Draghi signalled the central bank's determination and markets were positively surprised by the breadth of what was announced. One of the ECB’s new measures was the addition of euro-denominated non-bank investment grade (IG) corporate bonds to their QE shopping list. The IG corporate bond market is much smaller compared to the sovereign bond market so the purchases should help to reduce financing costs for eurozone companies and be supportive for European IG credit. High yield (HY) credit should also benefit as investors move down the risk spectrum into the even smaller HY markets in a search for yield as a result of falling IG spreads.
ECB broadens purchases
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