Reuters Insider - ECB joins trillion dollar club, but stocks still struggle

Baader Bank AG

19/03/2020 12:37

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Source: Reuters Insider

Description: The ECB has unveiled plans for emergency bond buying that could
total more than $1 trillion. But even that hasn't done much for European
stocks. Julian Satterthwaite reports.
Short Link: https://tmsnrt.rs/2QuLrFH

Video Transcript:

Only twelve zeroes will do nowadays. After Donald Trump promised a $1 trillion
stimulus, the European Central Bank is also talking big numbers. Late
Wednesday it launched EUR750 billion in emergency bond purchases. Combined
with existing plans, that will take its buys for the year to EUR1.1 trillion -
about $1.2 trillion. The news failed to cheer Asian markets. Korea's Kospi
index plunged by over 8% on Thursday. The rest of the region saw declines of
at least a percent. Traders there say some investors seem to be liquidating
their share holdings for fear that markets will shut altogether. But Thursday
did at least see Europe's stock slide pause, briefly. The regional STOXX 600
index was up as much as 1.5% in early trade, before sliding back into the red.
Recession fears trumped any early optimism, with new figures showing German
business morale at 11-year lows. Even so, Baader Bank's Robert Haalver says
the ECB move did have an effect. 

The ECB will buy more than a trillion euros worth of bonds this year and its
message is very clear: issue as much debt in Europe as you want. We will make
sure the money is there, above all cheaply. So we will be seeing economic
stimulus packages we don't dare dream about yet. There will be lots of money
around so a recession does not turn into a depression.

Oil held onto some gains. International benchmark Brent Crude jumped as much
as 7% early Thursday.
But with sentiment and prices so volatile, traders say cash is king. As money
flows out of almost all other assets, the U.S. dollar was again among the
gainers