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    ECB's corporate bond buying program at the centre stage - BBH

    Research Team at BBH, suggests that from Europe the launch of the ECB's corporate bond buying program is among the main talking points. Key Quotes“The ECB's self-designed rules allow it to buy corporate bonds that at least one of the approved rating agencies regards as investment grade.  Although it has not been confirmed by officials, market participants suspect that the ECB did buy a corporate bond yesterday that was rated investment grade by only one agency.  The ECB says it will not have to sell the bond if at some point that one rating agency cuts its assessment.The idea is that by buying such an instrument, the ECB is demonstrating its resolve.  Nevertheless, we are not convinced that what is holding back investment in Europe is that corporations do not have the funds or that interest rates are too high. For its part, the euro edged closer to our $1.1420 objective in Asia before being sold in Europe to $1.1350.  The intraday technicals suggest that the downside in the North American morning may be limited.  A retest on the highs seems reasonable, especially given the continued narrowing of the US two-year premium over Germany.  That premium stands near 131 bp, which is off about 10 bp in the past week.”

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