How The ECB “Actively” Rescued Markets Ahead Of The French Election

About three weeks ago, we said that “this chart definitely doesn’t show the ECB rescuing France.”

 

That was sarcasm of course.

While Citi argued that the deviation from the capital key shown above “wasn’t motivated by a desire to support the market around the French elections,” we thought the bank’s rationale for that contention was a bit lacking:

That just isn’t how QE execution works.

“That’s weird,” we said, “because here we thought that’s exactly how central bank intervention ‘works.’”

After all, if that’s not “how it works,” then what the f**k does “whatever it takes” even mean?

Good question, right?

Well as it turns out, BofAML smells a rat too. Read below as Barnaby Martin explains that “the ECB is more than just a ‘passive acquirer’ of assets [because] they are taking an active role in bond buying to manage the fallout from policy uncertainty.”

Via BofAML