European Central Bank president Mario Draghi has warned against the potential side-effects of monetary policy measures such as the massive €1.1 trillion asset buying programme currently being implemented by the ECB.
He cautioned that central banks risk stoking asset price bubbles and exacerbating inequality before concluding that the ECB will complete, in full, its €1.1 trillion programme in the face of speculation to the contrary.
Brenda Kelly, head analyst at London Capital Group, says that yesterday's speech by Mario Draghi is a way of trying to show that while the ECB policies may lead to excessive risk taking and reduce the incentive to reform, they are inevitable and needed to be done. The QE programme is resulted in reduced borrowing costs for some nations, she adds.
The analyst says that US Federal Reserve chief Janet Yellen has been trying to dampen down the over-exuberance of equity markets as US markets have been flying that bit higher on the back of the Fed's quantitative easing programme. She says that speculation is growing that the Fed could tighten rates some this year. The Fed is signalling a warning to investors that rates could rise at any time, even as close as next month, but the markets are only pricing in rate rises by December at the very earliest, she adds.
Markets have also seen a significant bounce in the euro versus the dollar mainly to the fact that we have seen some weak US economic data and stronger growth figures from the euro zone. But Ms Kelly cautions that this bounce might well be short-lived.
MORNING BRIEFS - Tricel, which was previously known as Killarney Plastics and makes products such as water storage tanks, is expanding and expects to add up to 100 new jobs in Ireland over the next 18 months. 40 of those will be at its Killarney headquarters. The jobs will be in areas such as engineering, research and product development. The investment required for the expansion is being supported by Enterprise Ireland.