Ahead of the ECB announcement
After all the leakages, promises and threats in the European soap opera, today is the day of truth for the ECB. In what can only be seen as huge disappointment for the central bank and Draghi yielding to German demands, the latest leaks suggest that the final plan would not include yield caps, just sterilised bond buying. The most important bit here is the word sterilized, as it means that the ECB’s overhyped bazooka is nothing more that the continuation of the SMP (that has been dormant for over 6 months because it did not work). As sterilised means no new money is created, it is hard to imagine how that will help Europe at a time when Spain alone experiences billions of dollars in outlfows each month.