Coming up during the European session on Tuesday, something to keep an eye out for
- Germany's constitutional court rules on the legality of the European Central Bank's outright monetary transactions (OMT) scheme
- The OMT gives the ECB powers to buy the debt of financially strained member countries
- The European Court of Justice upheld the scheme last summer
- But arguments in Germany's top court are ongoing, saying it exceeds ECB mandate & violates German law.
The German court may stop short of outright rejection
- But it could limit Bundesbank participation
If its struck down by the court, it could effect confidence in the ECB's ability to tackle crises, and perhaps raise doubts about the use of any future unconventional tools. There is also a separate legal challenge over the ECB's 1.74 trillion euro asset-buying scheme