ECB scraping the bottom of the barrel
The big news in US trading today was a leak suggesting the ECB is investigating buying municipal bonds as part of its QE program.
At first, that sent the euro lower on the kneejerk reaction (more QE = EUR negative) but a second look raises some questions.
I mean, we're talking about buying muni bonds for QE? That's a sign that Draghi is finding it tough to find bonds to buy. So the real takeaway is that the ECB might end up buying fewer bonds because it can't find enough to buy.
That's one reason the euro is up to 1.0763 after falling as low as 1.0705 on the municipal bond buying story.
Reuters has the full story on ECB muni bond buying.
