Just a quick collection from previous posts to help you in guessing what will come out of the ECB's meeting and Bernanke's address tomorrow.
ECB WATCH
4-MAY
ECB preview: We expect ECB to cut in June – Danske
Bank (pdf)
Time for the Draghi and Bernanke Puts – Humble
Student
The ECB is likely to reduce interest rates in
the face of economic weakness in the eurozone, but don't expect too much
more…My guess is that investors looking for hints of another round of QE from
the Fed on Thursday are likely to be disappointed.
Fed policy: So many risks, so few tools – MacroScope
/ Reuters
there is not very much more the central bank
can do to effectively boost economic growth and bring down unemployment… That
doesn’t mean the Fed won't try.
Pond Says More Fed Stimulus Is `Increasingly
Likely' – BB (mp3)
5-MAY
ECB Under Pressure to Ride to the Euro's Rescue – NYT
While the situation in the euro zone appears bad
now, it could get much worse… The ECB may decide it needs to keep some
firepower in reserve, to address even more serious circumstances and to keep
the heat on political leaders.
ECB and FOMC focus: Reform or not? C'mon! – Saxo
Bank
Steen
Jakobsen: It may not be politically
acceptable, but Germany is right, and involuntarily so. This week and the next will tells us
whether the ECB goes for reform or not. If Draghi does anything then talk of
reforms needs to stop – and Europe is worse off. If Draghi waits (until June 17 and the next EU Summit),
then at least he tried.
ECB and euro governments play chicken – Hugo
Dixon / Reuters
The euro zone crisis is a multi-dimensional
game of chicken. There isn’t just a standoff between the zone’s core and its
periphery; there is also one between the ECB and the euro zone governments over
who should rescue the single currency. In such games somebody usually blinks.
But if nobody does, the consequences will be terrible.
Citi’s view
on ECB’s available tools: we are going into
the meeting expecting disappointment, but ready to be surprised if the ECB
takes a more aggressive stance.
Goldman Previews ECB "Hope For Best,
Prepare For Worst" – ZH
We expect the ECB to keep rates on hold this
Wednesday and also expect no announcement of further non-standard
measures...but would come out in force if needed
6-MAY
We have suggested that the market is
under-estimating the risk of action by the ECB.
Only So Much ECB Can Do About Crisis – WSJ
With Greek elections approaching—and its future
in the euro at stake—as well as a critical European Union summit looming at the
end of June, a "shock-and-awe" response from the ECB seems unlikely
just yet.
FED WATCH
4-MAY
Will rates stay low, QE or no? – alphaville
/ FT
JP Morgan,
Deutsche Bank commentary
Goldman's Confidence That QE Will Be Announced
On June 20 "Has Grown" – ZH
Our baseline remains that Fed officials will purchase
a mixture of mortgages and long-term Treasuries,
6-MAY
The TIPS curve has inverted – Sober Look
However this move in TIPS certainly raises the
risk of near-term deflation, driven by weak demand growth. And deflation is
notoriously difficult to get under control.
Betting on QE3? Not So Fast… – MarketBeat
/ WSJ
In the past, the Fed has been quick to act when
it seems that the risk of deflation is growing. But in this chart it doesn’t
seem like the market is pricing in much of a chance of deflation.
Fed(wire) to the rescue – alphaville
/ FT
Hilsenrath notes that the Fed’s main options
are doing nothing; doing some more signalling; a short extension of Operation
Twist; or outright new bond purchases.
Save Us, Ben Bernanke, You're Our Only Hope – The
Atlantic
How Star Wars tells you everything you need to
know about the miserable U.S. recovery and the
Federal Reserve that has failed to improve it.
Morgan Stanley Sees QE3 Rally Lasting Hours Not
Weeks – ZH
Drumbeat’s Getting Louder: the Fed Must Save
the World – MarketBeat
/ WSJ
Lloyds’s Schmidt Sees More Asset Purchases by
Fed – BB (mp3)
RDQ’s Ryding Says Fed Will Extend Operation
Twist – BB (mp3)