Back in early December 2015 the European Central Bank (ECB) disappointed with an announcement on the level of stimulus for the European economy. As a result, markets lurched into a negative spiral. It wasn’t just because of Europe, with many other factors contributing but the ‘good news’ was already priced in and the manifestation was a loss of confidence.
The International Monetary Fund has warned that the world faces a growing “risk of economic derailment” and needs immediate action to boost demand. We therefore look to Thursday’s announcement from the ECB with nervous anticipation. Hopefully they will deliver what the markets want and deliver a boost to lending.