Dear Reader,

Today, Mario Draghi announced unconventional measures(ABS and covered bond purchases) and lowered the main interest rate(s).

In my opinion, this speaks volumes about the (dire) economic situation in Europe. The euro broke under 1.30 USD. I think that the ECB decision would provide additional boost for the global equity markets. The run goes on and no correction in sight...
The EUR/USD could go even lower, to 1.25 at first and with a target of 1.20.

About the eurozone economy: most of the countries have deep rooted structural economic problems. The problem with reforms is that the benefit comes in the long run, the pain is in the short run. The ECB is trying to help in the mean time.
I believe the eurozone stock markets will underperform their US and emerging(BRIC) counterparts, but they should post positive returns for 2014...


Disclaimer: This article is provided solely for informational purposes, and does not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities mentioned in the blogpost!