The euro has fallen on a report from Reuters that the ECB is considering buying corporate bonds on the secondary market.

  • ECB work on buying corp bonds is already well underway but many issues still undecided
  • ECB may discuss corp bond buys as early as December and may decide to go ahead and begin in Q1 2015
  • Reuters cites “several sources familiar with the situation”

An ECB spokesman has come out and said that “The governing council has taken no such decision”. They may not have taken a decision but he/she hasn’t dismissed that it could happen.

Corporate bond buying has been on the table but it faces the same problems of who and what to buy. At the moment the ECB has started ABS in France and Spain. It’s one stage down from stepping into sovereign bond buying. If we ever get that mentioned by sources, the euro will tank.

The full story from Reuters:

The ECB has already carried out work on corporate bond buying, which would widen out the private-sector asset-buying program it began on Monday. It is hoping these measures will foster lending to businesses and thereby support the euro zone economy.

“The pressure in this direction is high,” said one person familiar with the work inside the ECB, speaking on condition of anonymity.