Search  Follow Investorideas on Twitter  Investorideas is on Facebook  Investorideas is on Google Plus  Investorideas is on Youtube  Investorideas is on Pinterest  Investorideas is on tumblr  Investorideas is on LinkedIn  Investorideas RSS 

Investorideas podcasts on iTunes, Google Play Music and potcasts - cannabis news and stocks to watch plus insight from thought leaders and experts crypto corner    Play by Play – the latest sports headlines and sports stock news


Join Investor Ideas Members to access the Renewable Energy stocks directory, water stocks, biotech stocks, defense stocks directories and the Insiders Corner

Eurozone equity rally remains on – but ECB set to change monetary policy's direction of travel


July 6, 2017 ( Newswire) The Eurozone equity rally remains on, despite hints that the ECB is preparing to change its monetary policy, affirms a leading investment analyst.

The comments from Tom Elliott, International Investment Strategist at deVere Group, one of the world's largest financial services organizations, come as the European Central Bank (ECB) releases the minutes from its latest meeting on Thursday.

Mr Elliott observes: "Investors should not be surprised by the change in tone of the ECB's latest minutes, released today. They confirm what we know: that the direction of travel for central bank's monetary policy is changing. But the pace of that change is likely to be glacial, given weak regional inflation pressures and a desire to avoid repeating the premature rate hike of 2011. The Eurozone equity rally remains on.

"The minutes of the 7-8th June meeting of the ECB's Governing Council in Tallin confirm that ECB policy is likely to be 'more of the same' over the remainder of 2017. That is, no change in interest rate policy and continued monthly purchases of EUR 60bn of bonds through its asset purchase program."

He continues: "European stocks fell on the release, after market commentators (ie, Reuters) noticed that a discussion took place over whether the long-running commitment to extend and/or expand the bond purchase programme should be dropped, in light of strengthening GDP growth in the euro zone. The Council decided to keep the commitment, for the time being.

"This should come as no surprise to anyone except stock brokers anxious to create a little fear and so churn client accounts."

Mr Elliott goes on to say: "It reflects a shift in bias within the ECB away from a fear of deflation, towards a fear of inflation. This was expressed by ECB head Mario Draghi last week in Portugal, a speech that investors also chose to over-burden with their own fears of imminent tighter monetary policy.

"But while the direction of travel for ECB monetary policy may be reversing, the likelihood of an actual reversal happening soon, or even this year is slim. Euro zone CPI inflation is actually falling, figures released on Friday show that in June it fell to 1.3% year-on-year (from 1.4% in May). This is well below the ECB's target rate of 2%. The ECB is highly conscious of the policy error it made in 2011, when it prematurely raised rates, only to see another recession follow in the euro zone.

"Stock market investors might instead like to focus on this paragraph from the minutes:

'Moving to the equity markets, the decline in US long-term yields and the continued low level of yields in the euro area had remained generally supportive of stock market developments. Moreover, equity valuations in both the United States and the euro area remained supported by solid corporate earnings and favourable data. Gains in stock prices had been relatively broad-based, covering both financial and non-financial firms. The improved economic outlook was thus much more visible in global equity markets than appeared to be the case in bond markets.

"Implied market volatility was also at historic lows, suggesting no concern about a sharp adjustment. Indeed, the rally in the stock markets appeared to be fairly robust to variations in political uncertainty, which no longer seemed to be factored in."

deVere Group's International Investment Strategist concludes: "The Eurozone equity rally is still in place, and still supported by the ECB."

deVere Group is one of the world's largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

More Info: Newswire

This news is published on the Newswire - a global digital news source for investors and business leaders

Disclaimer/Disclosure: is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. More disclaimer info: Learn more about publishing your news release on the newswire

Additional info regarding BC Residents and global Investors: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: Global investors must adhere to regulations of each country.

Please read privacy policy: