- Philip Lawlor, a partner at London-based Smith & Williamson Investment
After announcing an acceleration of money printing to boost bond buying before liquidity dries up during Europe's summer vacation period in July and August, the European Central Bank slowed its weekly pace of purchases. The central bank bought 11.819 billion euros worth of assets in the week ended May 22, marking the smallest increase in three weeks. Under the quantitative easing programme which began in early March, the ECB aims to purchase 60 billion euros a month of bonds, asset-backed securities and covered bonds. The scheme is intended to last till September 2016, or beyond to ensure a sustained adjustment in the inflation path back towards the ECB's 2% target.
Meanwhile, another scandal broke out after one of ECB officials provided high-impact market information to a private audience including major hedge funds before it was made public. ECB executive board member Benoît Coeuré shared fresh details of the central bank's bond-buying stimulus programme that became available to broader audience the next day. Last Monday, Coeuré gave new details of the ECB's bond-purchase plans in a speech that took place following an all-day conference. The ECB said it planned to publish Coeuré's speech at the same time as he gave it, but due to an error it was not released until the following morning. When the speech went public, the Euro tumbled and stocks and bonds soared.
© Dukascopy Bank SA