ECB Expected to Refrain from Rate Cuts

The European Central Bank (ECB) may avoid future rate cuts after its promise to buy government bonds lowered borrowing costs by moving yields lower. Economic confidence seems to be slowly stabilizing, leading to speculation that it may even raise them in late 2013.

The eurozone recorded a 0.1% contraction in the third quarter, pushing it back into recession three years after it emerged from the last one. Despite these concerns, investors have remained relatively calm given new cohesive action on the part of the ECB and euro governments.