Monetary policies and financial markets
The ECB extended its private asset purchase program and also reduced the deposit interest rate to up to -30%.. In the United States, the Fed, increased the benchmark interest rate for the first time in nine years, to 0.25-0.50%.
Public debt markets
The profitability of long-term public debt markets in the United States and Germany have remained at very reduced levels. These assets have been supported by reduced inflation, the accommodating characteristics of monetary policies and doubts concerning global economic growth.
ECB balance sheet (€ billions)
Yields on German 10-year government bonds (%)
In Europe, public debt has continued to be supported by the ECB’s monetary policy, In any event, the yield of public debt of these countries has reached historic minimums.
In currency markets, the euro has once again been significantly devalued compared with the dollar and the pound sterling. This depreciation largely occurred in the first quarter, coinciding with the announcement of the purchase of public debt by the ECB.
Financial markets in emerging countries
The financial markets in emerging countries have maintained high volatility and were severely affected during summer, with strong exchange depreciations and an abrupt stock market decline in China.
Shanghai Stock Exchange (index)