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While the previously soaring banking stocks have cooled down somewhat, arguably because Italy has asked the ECB to give it until mid-January to rescue Monte dei Paschi, the DAX and CAC have immediately begun to build on the various highs struck on Wednesday. That is because it the Eurozone central bank is likely to announce an extension to its quantitative easing programme later today, with analysts expecting Mario Draghi and co. to move the bond-buying deadline beyond its current March 2017 end-point.

The big question, however, is whether this prolonged purchasing power remains at €80 billion a month, or whether it is cut to €60 billion; an added complication is that the former figure could signal a 6 month extension, while the latter may take place over a slightly lengthier 9 months. The markets may not be happy to see any kind of ‘tapering’, especially if it isn’t compensated for by a longer than forecast expansion, so there could well be fireworks as the meeting’s details are released.

The FTSE continued to benefit from the run-off Eurozone goodwill this morning, remaining above 6900 with an admittedly mild 0.2% rise. The index lacks real news of its own this Thursday, so will likely be dictated by whatever the ECB produces and how it ends up affecting the pound.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Connor Campbell

Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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