Hopes of near-term policy boost fade further

Developments last week confirmed that support for the periphery from the region’s core governments will be slow in coming. Some attention has turned back to the ECB for policy support, but it has very little left in its armoury. Its recent interest rate cut has had a limited positive effect at best. And while the IMF is calling for full-blown quantitative easing, this would be a very blunt tool with which to tackle the euro-zone’s crisis and one which the ECB is unlikely to use for some months yet.