The Fed will pull the global capital flow to the ECB turned passive

European Bank (ECB) Yu December 8 announced maintained interest rate not variable, and will purchased debt plans continued to December 2017, but from April up reduced purchased debt scale, the ECB of decision, means European of short-term interest rate market will keep low-grade and stable, if United States joint associate will (Fed) as General expected rose card, beauty, and Europe Lee poor will pulled big, and Euro go weak, may further affects non-beauty currency performance and global funds flows.

When the ECB bond purchases each month rate will be reduced from € 80 billion to 60 billion euros the news got out, strong euro, bond yields higher, but after European Central Bank Chief Mario Draghi will speak, at least until the end of next year for the foreseeable future, ECB bond buying rate to maintain or increase the two possibilities.

ECB the release policy implication is that, although the foreseeable future is unlikely to raise monetary policy will remain loose for a long time, however, the ECB will reduce the pace of purchases each month and reduce market distortions, long and spreads widened slightly. As for the euro will be strong or continued to weaken, to bias the Fed doves?

In other words, the impact of monetary policy on exchange rates within the euro zone will be converted into passive. ECB this Conference made points currency policy of adjustment, including (1) reduced each months purchased debt of speed, from 80 billion euro reduced to 60 billion euro, below market originally by expected of 80 billion euro; (2) announced extended purchased debt of Shi drive, is 60 billion euro of purchased debt speed will continued to December 2017, extended 9 months of purchased debt Shi drive, beyond market original expected of 6 months; (3) to solution may appeared no debt can buy of problem, ECB adjustment purchased debt of parameter,

Contains buying bonds the lowest maturity narrowed from 2 years to 1 year, if necessary ECB buying bonds yield less than bonds due from central bank interest rates. If General loose, refers to an estimated € 80 billion to extend for 6 months of the original market policy, its total size of about 480 billion euros, announced that 60 billion euros this time extended to 9 months, policy even reached 540 billion euros, that is, in fact, the policy of not less than market expectations.