Mr Kirk notes the president of the ECB also suggested it would be helpful for fiscal policy to play a greater role alongside monetary policy, although with 18 national budgets to consider this could be a complex issue.
“Clearly Mr Draghi is concerned about what he sees as a diverging path of US and European monetary policies and this is likely to see the ECB step up their stimulus package to try and breach this widening gap. The big question is what can he do and what will be the result. One result of a more proactive stimulus should be a weaker euro, which will help drive exports and possible import a bit of external inflation,” says Mr Kirk.
“The one firm conclusion is that the ECB are about to engage on a more proactive set of policies to stimulate the eurozone economy. Whether this is from active asset purchases or accommodative monetary action the result will be a more supportive backdrop for credit.”
It looks like the eurozone on both an economic and political level could be the place to watch for the rest of the year to see what impact both Mr Draghi’s policies, and the geopolitical turmoil in the east of the region will have on investors and the markets.
Nyree Stewart is features editor at Investment Adviser
