EFTA02349183.pdf

From: Paul Barrett < Sent: Friday, October 20, 2017 1:48 PM To: jeffrey E. Subject: FW: ECB QE much bigger See the line in Yellow. That's why European HY=trades at the same level as 10yr US Treasuries. This will be a big trade f=r us next year. Paul Barrett Alpha Group Capital LLC From: Torsten Slok Sent: Wednesday, Subject: DB: ECB QE much bigger There are various w=ys of measuring the impact of QE carried out by the Fed, ECB, and Bal. One=simple comparison is to look at the size of QE relative to net issuance. T=is reveals how much additional "firepower" each central bank brought to the market in an attempt to lower long rates =nd narrow credit spreads and boost stock markets. <=0:p> For the Fed, Treasury purchases never exceeded Treasury=net issuance whereas for the BoJ QE was 3 times bigger than net issuance a=d for the ECB QE is currently 7 times bigger than net issuance.=span style="font-size:12.0pt"> This difference =n QE magnitude across the G3 is an important reason why the ECB exit is li=ely to be a much bigger event for markets, see also my note last week looking at the $8trn in bonds yielding negative interest rates, chart inserted again at the bottom here. EFTA_R1_01323900 EFTA02349183 Let us know if you =ould like to add a colleague to this distribution list.<=p> co:p> Torsten Slok, Ph.=. Chief International=Economist Managing Directorq=pan> Deutsche Bank Secur=ties This communication may contain confidential and/or privileged information. =f you are not the intended recipient (or have received this communication =n error) please notify the sender immediately and destroy this communicati=n. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidde=. Please refer to https://db.com/discl=sures <https://db.com/disclosures> for additional EU corporate and regulatory disclosures. Deutsche Bank does not render legal or tax advice, and the information cont=ined in this communication should not be regarded as such. 2 EFTA_R1_01323901 EFTA02349184