Forward inflation expectations for Europe have collapsed to all-time record lows (based on 5Y forward implied 5Y inflation) as the market grows increasingly impatient at Draghi’s dragging his “whatever it takes” feet on pulling the sovereign QE trigger.
With 8 European nations now in outright deflation, the growing political pressure on the ECB to actually “do” something is, however, equal and opposite to Germany’s (read Buba’s) insistence that member states have some fiscal discipline (oh and the fact that OMT may just be exactly what we always said it was – illegal and a mirage).
With France shunning Brussels laws directly, and Italy flouting the “hookers-and-blow” GDP adjustment to improve its debt-to-gdp ratios, is it any wonder that Germany sticks to its anti-hyperinflationary, fiscally responsible guns… But then again, as we have seen again and again with the failed European Union, beggars can be choosers as politicians are unwilling to give up their perks in favor of helping the people that voted for them (or didn’t in some cases).
via Zero Hedge http://ift.tt/1F3ixzY Tyler Durden