In the latest German think tank report we saw comments surrounding their growing concern of dangerous bubbles after the ECB took the next step of measures and cut interest and deposit rates last week. The ECB president Mr Mario Draghi also hinted that the Eurozone could begin its own round of QE.  As Clemens Fuest the German economist put it, ”I’ve got a bad feeling about this…I am concerned by the danger that the ECB is producing new bubbles with its policy of cheap money. We have all the ingredients of a bubble: The prices of real estate and stock markets continue to rise, and on the bond markets, yields are falling despite high risks.”

On Thursday the ECB will reveal its monthly bulletin, and the announcement will provide economic data to support the interest rate reduction that was made last week. If the figures suggest additional monetary easing we could see the European equity markets take the next leg higher. As the ECB continue on their flight to prevent deflation in the Eurozone lets hope that the injection on cheap money into the EU doesn’t create the inevitable.