ECB holding off bond purchases
In a show of confidence in the euro zone economy, the European Central Bank (ECB) has today confirmed only a minimal purchase of bonds last week as a way of attempting to shore up the European economy. The €10 million acquisition of bonds last week is minimal compared to the billions of euros spent in May this year. So why is the ECB holding back?
Despite earlier concerns that the European economy was in a terrible downturn and headed for "oblivion", recently we have seen signs of recovery in the leading French and German economies. If this continues we will see the euro zone economy dragged higher by these two leaders which is the reason why the authorities have held off injecting more capital into the marketplace, for the moment. However, the European authorities have yet to close down the bond purchase program which would indicate a certain degree of concern about the short to medium-term direction of the euro zone economy.
After the last few weeks many investors will be pleased to see some relatively good news on the horizon with regards to the euro zone economy which has been under pressure for some time, although those who believe we are "out of the woods" may need to think again!
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