Collision course

摘要

So this is it. After much hemming and hawing, the European Central Bank has finally joined the quantitative easing ranks by pledging to buy at least €1.14trn of bonds in a bid to jolt the eurozone's economies back to life and bring a rapid halt to the deflation now blighting some countries. Financial markets were jubilant about the announcement. The German DAX hit a new high, while government bond yields - including those of countries such as Italy, Spain, Ireland and Portugal that only a few years ago were on the brink of financial ruin - dropped to new lows. Investors clearly expect QE to propel the equity and bond bull run even further. They are probably right.