All eyes will be set on the European Central Bank (ECB) which is poised to announce its last big policy plan on Thursday for buying the government bonds, attempting to bring life into the waning euro zone economy and fending off the deflation.
The market expectations are exorbitant as the ECB is set to launch a large-scale program of quantitative easing (QE) for printing money to purchase the sovereign bonds, despite severe opposition from Bundesbank of Germany and rising concerns in Berlin that the measure could allow spendthrift nations to loosen their economic reforms.
According to a reliable source in euro zone, the Executive Board of ECB that met on Tuesday has come up with a proposal that the Central Bank should buy 50 billion euros (USD 58 billion) in bonds per month from March.
The policymaking Governing Council, which constitutes 25-member, began meeting at 0800 GMT on Thursday for discussing the proposal. Following the conclusion of the meeting, ECB President Mario Draghi will address a news conference at 1330 GMT to brief the minutes of the meet.
Sassan Ghahramani, CEO of SGH Macro Advisors in New York, said, “I expect they will deliver, and launch a QE program that will be probably larger than 500 billion (euros).”
The New York-based SGH Macro Advisors is engaged in advising hedge funds.
In December, the inflation rate in euro zone turned negative and consumer prices dropped 0.2 percent, which is far below the target of ECB that they should increase just under 2 percent annually.
The ECB has already slashed the rates of interest to record lows and commenced buying private sector assets as well as directed hundreds of billions of euros in cheap loans to banks, hoping that they would lend the money on into the economy and stimulate its further growth.