The Euro has caught up with the US
- 19 March 2020 (3 min read)
Gilles Moec, Group Chief Economist at AXA Investment Managers, comments on yesterday’s ECB announcement:
It is a very good package, at last.
The ECB’s limits are still nominally there but they no longer bite. That’s the welcome main takeaway from last night’s announcements.
Beyond the impressive overall new figure for QE (EUR 750bn until the end of 2020, with the possibility to do more), the key is that on the “limits” the “Council will consider revising them to the extent necessary”. The capital key will remain the “benchmark” of the purchases but they will be conducted “in a flexible manner” across jurisdictions and between public and private assets. So in reality those limits are now probably mere “reference values”.
They have added corporate commercial paper to the list of purchasable assets which is important given the pressure on this market, while on the macro point of view it is key to a number of crucial European corporates which don’t need this additional concern at the moment.
The Euro has caught up with the US. Both legs of economic policy, monetary and fiscal, are now providing massive support. The depth of the economic short term shock still depends on how the epidemic itself is handled, but at least there is now a convincing policy apparatus to deal with the second round effects which could hamper the rebound.
The result is good.
Press contacts
Ellis Ford
Ellis.Ford@axa-im.com | +44 20 7003 1225
Jamie Wynn-Williams
Jamie.Wynn-Williams@axa-im.com | +44 20 7003 2680
Hélène Caillet
Helene.Caillet@axa-im.com | +33 1 44 45 88 06
Notes to Editors
About AXA Investment Managers
AXA Investment Managers (AXA IM) is an active, long-term, global multi-asset investor. We work with clients today to provide the solutions they need to help build a better tomorrow for their investments, while creating a positive change for the world in which we all live. With approximately €801 billion in assets under management as at end of December 2019, AXA IM employs over 2,360 employees around the world and operates out of 28 offices across 20 countries. AXA IM is part of the AXA Group, a world leader in financial protection and wealth management.
- Visit our website: www.axa-im.com
- Follow us on Twitter: @AXAIM & @AXAIM_UK
- Follow us on LinkedIn: https://www.linkedin.com/company/axa-investment-managers
- Visit our media centre: www.axa-im.com/en/media-centre
AXA Investment Managers UK Limited is authorised and regulated by the Financial Conduct Authority. This press release is as dated. This does not constitute a Financial Promotion as defined by the Financial Conduct Authority and is for information purposes only. No financial decisions should be made on the basis of the information provided.
Issued by AXA Investment Managers UK Limited which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales No: 01431068 Registered Office is 22 Bishopsgate, London, EC2N 4BQ.
A member of the Investment Management Association. Telephone calls may be recorded or monitored for quality.
Information relating to investments may have been based on research and analysis undertaken or procured by AXA Investment Managers UK Limited for its own purposes and may have been made available to other members of the AXA Investment Managers Group who in turn may have acted upon it. This material should not be regarded as an offer, solicitation, invitation or recommendation to subscribe for any AXA investment service or product and is provided to you for information purposes only. The views expressed do not constitute investment advice and do not necessarily represent the views of any company within the AXA Investment Managers Group and may be subject to change without notice. No representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein.
Past performance is not a guide to future performance. The value of investments and the income from them can fluctuate and investors may not get back the amount originally invested. Changes in exchange rates will affect the value of investments made overseas. Investments in newer markets and smaller companies offer the possibility of higher returns but may also involve a higher degree of risk.