To the dismay of some, ECB Pres Trichet is saying no to peer pressure and is not discussing at all any expansion of their bond purchases and no new funding facilities and the Euro has given up its morning gains in response. They will continue though to offer 7 day, one month and 3 month access to their borrowing window and won’t end them as they wanted to before the latest sovereign flare up. The ECB clearly doesn’t want to get into the money printing game to any extent more than they have to and they seem to want to wait out the aftermath of the Irish bailout outside of the initial panic by the markets. We have to believe that German influence is high in what the ECB does and maybe this comment from the German Finance Minister yesterday was a tip off to the lack of action from the ECB today, “The market’s nervousness over some countries is excessive…Government’s shouldn’t always respond to market nervousness.”
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