When Mario Draghi writes his first check to pay for asset purchases, he might not use much ink.
While the European Central Bank president pledged to start a program this month to buy asset-backed securities and covered bonds, initial buying in those markets will probably be modest, according to two euro-zone central bank officials who asked not to be identified because the matter is private. That will keep investors guessing on the scope of his intentions today as they bet the ECB will expand the range of securities it can buy.
Policy makers gathering in Italy for their monthly decision are under pressure to act after Draghi’s pledge to add as much as 1 trillion euros ($1.3 trillion) to the ECB’s balance sheet failed to rein in bets on a worsening price outlook in the euro area. Speculation on how far he’ll go sent Greek debt higher after the Financial Times said he wants looser requirements on the quality of assets the central bank can accept.
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