Are Markets Overreacting to a Potential ECB Taper?

The transcript discusses the market's reaction to the European Central Bank's (ECB) potential tapering of its quantitative easing (QE) program. It highlights investor nervousness and the volatility of peripheral yields, particularly in Italy and Spain. The discussion includes speculation on whether the ECB is testing market reactions to tapering and HSBC's perspective that the ECB may extend QE into 2017. The transcript also explores the challenges the ECB faces, such as negative rates and limited economic growth, and the potential implications for future policy decisions.

What factors contributed to the recent surge in Spanish yields?

What implications does the ECB's tapering have for the European economy?

How does the market's reaction reflect investor sentiment regarding the ECB's potential tapering?

Discuss the potential consequences of extending QE for another six months.

What challenges does the ECB face in managing negative yielding debt?