More money, more help?

Sometimes I feel like the world has gone crazy. And not only the investor one. So let’s take yesterday. What to say to the small motorcycle not yielding to you when there is a tipsy creature with horns and linen bag over its shoulder and chain sitting on it and offended yelling at you that it won’t take you to the hell on top of that?

The ones with horns according to the available information didn’t take the Italian Prime Minister M. Renzi, who did resign after the unsuccessful referendum about the constitutional changes to the hell either yesterday but the Italian president wants to see him in the chair at least until the Italian budget for the next year is approved.

 

For Renzi that means roughly one more week in the Prime Minister’s chair. That’s why is the stock Europe shining green today. The German index DAX was adding 0.3 % in the morning. I start to feel like the investors are hoping for St. Nicholas’ present from European central bank (ECB). The bank has a meeting this Thursday. Because of the political struggle in Italy, everybody is betting on the ECB to continue giving money away.

On the one hand, that would be a good news for the euro. More help from ECB = hope that the problems of Italian banks won’t start up in entire Eurozone. But on the other hand, continuing with buying bonds will be pushing down the interest activity of euro. And especially in the case when the American Fed is probably only a few days away from raising its interest rates. Euro can temporarily rejoice on Thursday from the continuous support of ECB and that way even from the temporary peace in Eurozone. Either way from the view of another month, I think that euro will hand out part of the profit back to the dollar and depreciate.