(23 April 2020)DAILY MARKET BRIEF 2:(ECB) having hit the limits of its stimulus capacity

<p>In Europe, the future of the union is at stake. With the European Central Bank (ECB) having hit the limits of its stimulus capacity and Christine Lagarde’s firm push for fiscal stimulus, the European finance ministers are, this time, left to their selves to tackle the biggest ever recession that the bloc has known since its establishment. At today’s summit, investors are looking for the announcement of a 2-trillion-euro rescue plan to tackle the crisis. While we believe that a wide-ranging agreement is highly likely, the issuing of the so-called coronabonds is a faraway dream as wealthier, and less impacted nations aren’t convinced with the idea of issuing a joint debt, as they could finance their debt with relatively lower-yield bonds. And even their own debt to GDP ratio will explode as a result of weeks of economic shutdown. It is said that Germany’s debt to GDP ratio could rise to 10%, while Italy’s could reach the scary 150% level. So, it all comes down to how much the wealthier n</p>