ecb debt monetisation, page-5

She does seem to be hoping for a miracle. I don't know what it would be, once the bond market smells blood is is pretty relentless! Maybe if Japan gets downgraded focus will move there for a while haha

I think that if ECB did do it, it would perhaps be in conjunction with some form of easing from Fed, maybe of the kind seen before were the Fed provides USD to european banks etc. At the recent FOMC meeting the Fed seemed to have made its first hint that QE3 may be potential, but people seem to be interpreting those minutes in different ways.

The more we talk about this, the more I think if ECB prints, there will be atleast a short term market surge, with some AUD increase even against USD, out of habit if nothing else! I will keep my ASX:USD position open for the moment as it's been doing well, but will keep a very close eye on the ECB and Merkel. It's fair to say it won't happen without further Euro-drama, perhaps France downgrade, or more bad bond auctions. Still some money to be made on ASX:USD in that case.

Also, I do expect Glenn Stevens to do what the bond market tells him to do, and follow it down with interest rates. Hence still bullish USD vs. AUD.