The prices of many non-energy commodities have come down from their peaks lately, perhaps reflecting an actual or expected moderation of growth in Asia and ongoing demand and supply responses to higher prices. In addition, the dollar has stabilized as optimism has increased about the strength and durability of the expansion in the United States.
If different assets are imperfect substitutes, interventions by the central bank that affect the supply of various assets available to private investors could influence the prices of many other assets, including investment grade bonds, equities, real estate or foreign assets with consequences for the exchange rate.13 Higher valuation would also facilitate the process of balance sheet repair that is ongoing in the euro area, and more generally contribute to support credit growth.