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Did the euro move for you, too?

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  • Well, it is finally over. The ECB beat our expectations for the size of its quantitative policy experiment a little, but the structure is what matters. It will probably be easier to lengthen the duration of the bond buying than to increase the size, so EUR60bn a month raises the possibility of a more substantial printing operation.
  • Aside from abandoning the ever closer union, there is a concern that the ECB stressed inflation expectations; for the consumer these are a function of food and oil prices, unaffected by quantitative measures. Further the whole exercise emphasised style as much as substance - recalling Japanese policy in the 1990s.
  • Greece's elections take place on Sunday with the anti-austerity party Syriza leading in the opinion polls. Market focus is on the nature of debt restructuring negotiations, which are generally viewed as inevitable. It should be noted that the ECB will not be buying Greek government bonds any time soon.
  • The oil price rose slightly on the news of the death of King Abdullah of Saudi Arabia. His successor, King Salman, undertook responsibility for royal duties some time ago, suggesting that there is little chance of a dramatic policy break