Markets rally on ECB bond-buying announcement

Markets rose last week, and not for the first time, investors have a central bank to thank.

On Thursday, the European Central Bank announced after its monetary policy meeting that it would be buying 60 billion euros of sovereign bonds and other debt securities every month from March through September next year in an effort to avert deflation.

Stocks rose on Thursday on the decision, helping markets to finish the week up. The MSCI All-Country World Index rose 2.1 percent last week for its biggest weekly gain of the year. The Standard & Poor’s 500 Index rose 1.6 percent. The STOXX Europe 600 jumped 5.1 percent to the highest since December 2007. The Nikkei 225 Stock Average rose 3.8 percent. The MSCI Emerging Markets Index rose 3.5 percent.

The euro fell 3.1 percent against the US dollar last week while European government bonds rose. Germany's 10-year bond yield hit a record low of 0.345 percent while Italy's 10-year bond yield touched a record low of 1.413 percent.

The euro could decline further this week after the Syriza party won the elections in Greece on Sunday. Led by Alexis Tsipras, the Syriza party had campaigned against fiscal austerity and promised to renegotiate Greece's debts, a move that could risk getting the country expelled from the euro bloc.