Easy does it

The ECB may not have launched its bazooka but the move to negative deposit rates and targeted LTROs is a clear signal of intent. Direct asset purchases (ABS) look a likely next step, but full blown QE remains on the table and will be utilised if the ECB sees any de-anchoring of inflation expectations. They are already moving lower, which adds some inevitability to this. We remain short euro versus the US dollar and remain long Eurozone equities.

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