Evolution of ECB quantitative easing program

The European Central Bank’s asset purchase program has accumulated €1.5 trillion in debt instruments since it started in 2014. The ECB will meet Thursday and plans to announced the third round of its quantitative easing program targeted at stimulating the economy within the eurozone. The ECB increased its monthly purchases rate from €20 billion to €80 billion in of qualified debt –mostly government debt, but also asset-backed, bank and corporate debt–, investors will be watching this week’s meeting to see if that amount will be drawn down to €60 billion per month.

Purchase1s in October and November were the largest- and second-largest single month purchases since the program’s inception. Corporate bonds represent a small piece of the total holdings, but they have been the fastest-growing sector in the ECB’s total holdings, increasing an average of 52% each month since they were added in June. Yields on euro-denominated corporate debt hit 10-year lows in August, but they have since ticked up as the euro has since weakened against the dollar.

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