ForexLive: Big Risk To 'Underestimate the ECB'
The European Central Bank is expected to announce its plan for quantitative easing on Thursday morning, with the central bankers expected to start asset purchases this month. However, Ryan Littlestone, currency analyst with ForexLive, said that traders should not "underestimate the ECB."
Littlestone argued on the website that the ECB has been front run in the bond market, meaning that there is little supply of bonds out there. So, Littlestone sees the opportunity for the ECB to push back its start date in order to "relieve some pressure" in the bond markets, giving the ECB more liquidity and better prices to buy.
Ahead of the decision, however, Littlestone explained that the opportunity for smaller traders is to buy European stocks – a beneficiary if money in the bond market starts to look for better yield. Littlestone recommends spreading out equity trades throughout Europe.
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