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Top German court refers ECB bond-buying to European Court

  • Germany's Constitutional Court has decided to refer a complaint against the European Central Bank's Outright Monetary Transactions (OMT) program, which allows the ECB to buy sovereign debt in the secondary market, to the European Court.
  • The German court believes there are "important reasons to assume that it exceeds the European Central Bank's monetary policy mandate and thus infringes the powers of the member states, and that it violates the prohibition of monetary financing of the budget."
  • However, the court "also considers it possible that if the OMT Decision were interpreted restrictively," it could be legal.
  • The court is due to rule on the legality of the eurozone's permanent bailout scheme, the European Stability Mechanism, on March 18.
  • This is "huge," tweets Reuters Jamie McGeever. Is "Germany giving up (its) veto, opening (the) door to outright QE?"
  • The euro, which was bumbling fairly innocuously, has taken a bit of a dive and is -0.2% at $1.3564. The DAX is -0.1%. (PR)
  • ETFs: FXE, VGK, EUO, EWG, FEZ, ERO, EU, IEV, EPV, EZU, HEDJ, DRR, FEU, BUND, EWGS, EUFX, UPV, ULE, FEP, GERJ, BUNL, DBGR, ADRU, URR, DXGE, FEEU, FGM, BUNT, GGOV, EURL, DBEU, EURZ, FIEU
Comments (4)
  • FullFocus
    , contributor
    Comments (30) | Send Message
     
    what does it mean for EUR/USD? probably bullish for EUR?
    7 Feb 2014, 04:47 AM Reply Like
  • mexec1
    , contributor
    Comments (40) | Send Message
     
    Negative ghostrider the pattern is full. This will be a head fake for currency markets. On the surface it seems bullish for euro but once the court rules they have the authority the ECB will then have the cover needed to truly to "whatever it takes" to fight deflation. So over a longer period this will drive down the value of the EUR if you can stand the volatile currency game.

     

    Good luck!
    7 Feb 2014, 07:50 AM Reply Like
  • FullFocus
    , contributor
    Comments (30) | Send Message
     
    I do not play currency games. I am just intrested in hedging my USD Equity exposure efficient as possible :). atm i do not hedge but anytime soon maybe its time again to hedge ...
    7 Feb 2014, 08:34 AM Reply Like
  • june1234
    , contributor
    Comments (3066) | Send Message
     
    Draghi said yesterday ECB stands ready to take additional steps. Doesn't sound like he's too concerned about it
    7 Feb 2014, 06:15 AM Reply Like
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