Quantitative easing

In making this decision, the Executive Board primarily took into account the outlook for inflation and its factors going forward, as well as the effects of past monetary policy easing, the central bank has announced.

The end of the European Central Bank's massive stimulus program has left Italy, France and Spain seeking new buyers for up to 64 billion euro ($73 billion) of bonds, ECB data suggests.

That's how much the ECB has "overbought" those countries' debt by, according to Reuters calculations on Thursday based on the bank's end-December stock of eurozone government bonds.

Greek banks are making plans for the period after Greece's exit from the bailout program, when they will no longer have access to a supply of cheap cash from the European Central Bank, so they are instead seeking liquidity through various alternative means outside the Eurosystem.

The government's objective of returning to capital markets is becoming increasingly distant, following the official decision by the president of the European Central Bank, Mario Draghi, to rule out Greece's entry into the ECB's quantitative easing (QE) program.

European Central Bank President Mario Draghi on Thursday put a definitive end to any hopes of Greece's inclusion in the bond-buying program (QE) and the extension of the waiver that allows Greek debt to be accepted as collateral for regular auctions of ECB cash, despite the junk rating of Greek bonds.

Last Thursday was quite a shock for the Greeks due to the Eurogroup decision to put off the disbursement of the final bailout tranche of 15 billion euros and the European Central Bank ruling out a waiver extension and a Greek inclusion in its bond-buying program, also known as quantitative easing (QE).

Last Friday's decision by Standard & Poor's to upgrade National Bank of Greece's covered bonds to investment grade will be crucial for the Greek lender in its accessing international markets and contributing toward the general improvement of liquidity in the local market.

Maintaining the eligibility of Greek bonds as collateral for European Central Bank liquidity and their inclusion in the ECB's bond-buying program (QE) would be an important catalyst for the improvement of the Greek bond market and investors' attitude toward Greece, market insiders stress.

European Central Bank President Mario Draghi on Monday lowered expectations that Greece could participate in the central bank's quantitative easing program (QE) after its adjustment program expires in August, saying a debt sustainability analysis will need to be completed before the country's bonds are included.

Key Takeaways (full report available here or here)