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Amazingly, it has taken us more than four years to get here. Perhaps even more amazingly, the QE has arrived long after the apparent crisis point for the euro-zone has passed – the hair-raising weeks of 2012 when Greece looked to be on its way out of the single currency and peripheral bond yields were rocketing skywards. Today, Spain’s 10-year bonds barely yield 1.5%, and the euro has weakened enough to generate a healthy current account balance.The ultimate and most politically controversial of emergency monetary measures comes not in response to impending crisis but in pursuit of the central bank’s core mandate of price stability. Some have said today’s decision is the logical conclusion of current president Mario Draghi’s promise, at the height of the crisis, to do “whatever it takes” to preserve the single currency’s integrity. But, in fact, it is simply the logical and possibly the only way the ECB can pursue its core mandate as deflation takes hold and its interest rates bump up against the zero bound. (While the Swiss National Bank has recently shown a possible way forward into the strange world of deeply negative rates, it is notable the ECB kept all of its rates unchanged today).Does deflation represent a threat to the integrity of the single currency? Given the indebtedness of some members, it certainly could, if left to fester, Japan-like, for a long time. Does the market anticipate such an outcome? Looking at the way it has been pricing things over recent weeks, one would have to conclude that it does.Not only have bond yields and inflation breakevens been plummeting – while the oil price has halved, gold has been getting a bid for the first time in ages, which suggests investors have started thinking about it as a currency without a counterparty again, rather than just another commodity, and are no longer turned off by the thought of holding an asset that generates zero income.This is why the way markets responded to today’s news is so important. The central bank came out with a slightly stronger package than expected, and all of the pro-QE plays that had been selling-off over the last couple of days caught a bid: yields were back down, slightly, and the euro sold off modestly. Gold headed back through $1,300/oz. It was looking like we would get a classic case of buying the rumour and selling the news – which, by the way, is precisely what we saw around the QE decisions from the Bank of England and the US Federal Reserve. That would have been a comforting sign that a lot of the positioning taken up over the past month or so has been technically rather than fundamentally driven: speculators on the margins making sure they caught the up-draught into the increasingly inevitable ECB QE decision, rather than hunkering down for a long haul of falling consumer prices and stagnating growth.Should we revisit that thesis in the light of today’s moves? Not necessarily. The modestness of those moves suggests they are not reflective of market disappointment but rather of appreciation that the central bank really is serious this time. The open-ended nature of the programme Draghi described in the press conference was notable, for example. The response of stock markets back this interpretation up.It’s early days, but if this more optimistic take on things sticks over the next days and weeks, we could be seeing the beginnings of what could be a powerful bull market in European risk assets – but perhaps not the long-overdue and much-needed correction in safe-haven rates. IPE’s Martin Steward analyses today’s long-awaited European Central Bank announcement“We are not running money printing presses,” said the president of the ECB.That was in the early summer of 2010, the man in charge was Jean-Claude Trichet, and he was reassuring French radio listeners that the recent decision to begin sterilised secondary-market purchases of private and government bonds was not the prelude to US and UK-style QE. He needed to do so because the central bank was running desperately low on credibility. Days earlier, Trichet had insisted this big step had not even been discussed; and the ECB had previously broken its promise that “no state can expect special treatment” on collateral eligibility requirements in order to try and get on top of the worsening Greek debt crisis.In my opinion column for IPE at the time, I made the fairly unsophisticated argument that the losses of the financial crisis were in the process of being socialised through the ECB, and that this would happen either through defaults on debts that were now held at the ECB, or through the soft default of “runaway inflation” as the euro was trashed with a massive programme of all-out QE.
Liverpool’s Alex Oxlade-Chamberlain, left, celebrates with Philippe Coutinho after scoring during the Champions League soccer match between Maribor and Liverpool at the Ljudski vrt stadium, in Maribor, Slovenia, Tuesday, Oct. 17, 2017. (AP Photo/Darko Bandic)MARIBOR, Slovenia — Liverpool rediscovered its potency by thrashing Maribor 7-0, matching the biggest away win in Champions League history and emphatically securing its first win in Group E on Tuesday.Mohamed Salah scored twice to follow up goals from Roberto Firmino, in the fourth minute, and Philippe Coutinho as Liverpool took a 4-0 lead at halftime.ADVERTISEMENT It’s too early to present Duterte’s ‘legacy’ – Lacson Jake says relationship with Shaina ‘goes beyond physical attraction’ Don’t miss out on the latest news and information. Sports Related Videospowered by AdSparcRead Next OSG plea to revoke ABS-CBN franchise ‘a duplicitous move’ – Lacson LATEST STORIES “We had bad luck in the last three or four games,” Salah said. “Everyone was confident a good result was coming.”It was the biggest margin of victory for an English club away from home in the European Cup or Champions League.Two other teams have also won 7-0 in the Champions League: Marseille over MSK Zilina in 2010 and Shakhtar Donetsk over BATE Borisov in 2014.ADVERTISEMENT Jake says relationship with Shaina ‘goes beyond physical attraction’ Kiss-and-tell matinee idol’s conquests: True stories or tall tales? Judy Ann’s 1st project for 2020 is giving her a ‘stomachache’ Coco’s house rules on ‘Probinsyano’ set Margot Robbie talks about filming ‘Bombshell’s’ disturbing sexual harassment scene Jo Koy: My brain always wants to think funny MOST READ Firmino added a second goal before Alex Oxlade-Chamberlain — his first for Liverpool — and Trent Alexander-Arnold completed the rout for Maribor’s heaviest loss in the competition.“Our attitude was outstanding — we were spot on from the first second,” Liverpool manager Juergen Klopp said.FEATURED STORIESSPORTSRedemption is sweet for Ginebra, Scottie ThompsonSPORTSMayweather beats Pacquiao, Canelo for ‘Fighter of the Decade’SPORTSFederer blasts lack of communication on Australian Open smogLiverpool started off with draws against Sevilla and Spartak Moscow, but this win lifted the English team to the top of the group on goal difference from Spartak, which thrashed Sevilla 5-1.Liverpool has struggled to turn chances into goals in recent games, notably draws in the English Premier League against Burnley and Manchester United that have dropped Klopp’s team off the title pace. View comments Carpio hits red carpet treatment for China Coast Guard PLAY LIST 02:14Carpio hits red carpet treatment for China Coast Guard02:56NCRPO pledges to donate P3.5 million to victims of Taal eruption00:56Heavy rain brings some relief in Australia02:37Calm moments allow Taal folks some respite03:23Negosyo sa Tagaytay City, bagsak sa pag-aalboroto ng Bulkang Taal01:13Christian Standhardinger wins PBA Best Player award Rockets rally to spoil defending champion Warriors return