The ECB will reduce its asset purchase substantially next year. What will be the implications for financial markets?

Watch this video and discover our experts view on financial markets 

Market View by Thomas Hempell, Deputy Head of Macro & Market Research

Market View 09/11/2017

Highlights: 
  • The economic momentum in the euro area remains robust. Solid consumption is complemented by strengthening investment activity. Price pressures, however, remain muted. Inflation in October was 1.4%, well below the ECB’s price target of slightly below 2%.
  • Risky assets have rallied remarkably this year, the MSCI World, for example, has gained more than 15% year-to-date while corporate bond spreads have fallen to 10-year lows.
  • After selling off for most of this year, the US dollar has gained some ground again over recent weeks. And there is more scope for the US currency to recover. The odds of a US tax reform have improved somewhat, which is supportive to the dollar.

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Edited by the Macro & Market Research Team. The team of 13 analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues.
The team translates macro and quant views into investment ideas that feed into the investment process.

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