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Thursday, March 7

7th Mar - Special: ECB Watch

I will add content and comments to this post during and after today’s press. Last update: 23:30 GMT 7-March

Previously on MoreLiver’s:

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ECB schedule & links
After an announcement of decisions at 12:45 GMT, governor Draghi will hold a press conference, beginning at 13:30 GMT with a reading of a pre-written statement, followed by a Q&A session with the press.

Dashboard at the previous meeting (click to enlarge)
Dashboard for the current meeting

ECB Says Private Lending Contracted for Ninth Month in JanuaryBB

Euro zone private lending falls, but the ECB gets its excuseTradingFloor
Juhani Huopainen: In the aftermath of the Italian election, the European Central Bank's whatever it takes promise is being doubted. To assure investors that there is a backstop, the ECB needs an excuse - and today it got it.

Kostaako EKP Italian "väärän" vaalituloksen?Jan Hurri / TalSa
Italian kansa on juuri äänestänyt väärin maansa parlamenttivaaleissa, jos markkinoiden ensireaktiot asiasta mitään kertovat. Samaa mieltä lienevät EU:n talouspäättäjät. Eurooppalainen demokratia sen sijaan sai vaihteeksi välierävoiton – jota kestää, kunnes EKP ja markkinat taas kiristävät Italiaan mieleisensä hallituksen.

It’s Frankfurt that should be your worry – not RomeThe Market Monetarist
The logic is that a ‘bad’ political outcome in Italy will lead the ECB to become more hawkish and effectively tighten monetary conditions by signaling that the ECB is not happy about the ‘outcome’ in Italy and therefore will not ease monetary policy going forward even if economic conditions would dictate it.

The inbuilt political stand-off in the ECB's bond-buying programme Open Europe

A flaw in euro zone defencesMacroScope / Reuters
The story of the last five months has been the bond-buying safety net cast by the European Central Bank which took the sting out of the currency bloc’s debt crisis. But now it has an Achilles’ Heel. The ECB has stated it will only buy the bonds of a country on certain policy conditions.

ECB Cash Seen as a DangerWSJ
Increasingly it seems that all the easy cash the European Central Bank has been doling out to fight the symptoms of the debt crisis could come at a high cost.

The Eager for Catastrophe BankFree exchange / The Economist
ECB policy can at this point be described as both cruel and unusual.

Weekly Focus: Can the ECB save Europe from Italy?Danske Bank (pdf)

ECB preview: No help for ItalyNordea

ECB Preview: Draghi turns softer as recovery failsDanske Bank (pdf)

Draghi Will Need to Push the Euro Down Some MoreWSJ
With the euro-zone recovery proving weaker than hoped, Italian politics proving as intractable as feared and the euro itself failing to fall far, there is every reason for Mario Draghi to hint at more monetary-policy easing this time round, writes columnist Nicholas Hastings.

Italy to Keep ECB On Hold Despite Gloomier Outlook ThursdayWSJ
The ECB is unlikely to provide further stimulus to the euro-zone economy on Thursday, but persistently weak economic growth has some economists looking for a rate cut later this year.

Did OMTs Turn the ECB Into a Real Central Bank?WSJ
There is a tide in the affairs of central banking which, taken at the flood, leads on to fortune, as Shakespeare almost said

3 Numbers to Watch: DE manufacturers' orders, ECB policy, US jobsTradingFloor
Analysts expect higher factory orders for Germany in January, followed by an ECB decision that will keep its benchmark rate at 0.75 percent. The market is also looking for a slight rise in US weekly jobless claims

Danske DailyDanske Bank (pdf)
US economy continues to show signs of improvement. Asian equity markets are mixed to lower overnight following small gains in the US. BoJ keeps policy unchanged as leadership is about to change. All focus is on the ECB and BoE but the consensus expectation is for no change. Market movers today: BoE & ECB meetings

Draghi Confronts Italy Impact as ECB Seen Keeping Rates on HoldBB
The ECB has to decide how big a threat Italy poses to Europe’s recovery. A rejection of austerity in the euro area’s third-largest economy has produced a political stalemate that’s driven up bond yields and undermined confidence in ECB President Mario Draghi’s scenario of a gradual economic upturn.

ECB to hold line on bond buys, keep rates at 0.75 percentReuters
The ECB will eschew dramatic action on Thursday to help Italy or other euro zone countries caught up in its backwash, despite the threat of political turmoil in Rome reigniting the bloc's debt crisis.

To print or not to printMacroScope / Reuters

It’s ECB day and it could be a big one, not because a shift in policy is expected but because journalists will get an hour to quiz Mario Draghi on the Italy conundrum after the central bank leaves monetary policy on hold.

Previewing Today's ECB's DecisionZH
Position Adjustment Ahead of BOE and ECBMarc to Market

ECB to keep the powder dryTradingFloor

Sentiment has turned more bullish on a rate cut at today's ECB meeting. We believe, however, that anybody expecting fireworks are setting themselves up for a disappointment and that the ECB will instead keep the main refinancing rate at 75bp.

Live Blog: ECB Rate AnnouncementWSJ


ECB keeps rates unchanged, but rate cut risks remainNordea
The ECB decided to keep interest rates unchanged at today’s meeting. Draghi’s statement was more or less unchanged in its wording compared with the statement a month ago.

ECB staff macroeconomic projections for the euro areaECB (pdf)

Data are soft - Draghi is notDanske Bank (pdf)

Draghi Pokes Fun at Critics’ “Angst of the Week”WSJ

The ECB's Press Corps Realize They Have No Idea What OMT Is: "The Rules Are What They Are" Explains DraghiZH

Draghi Keeps Gradual Recovery Faith as ECB Cuts ForecastsBB
ECB President Mario Draghi stuck to his view that the euro region will gradually recover later this year even as officials trimmed their economic forecasts and considered cutting interest rates.

ECB afterthoughts: Draghi’s bad cop dayTradingFloor
Juhani Huopainen: The ECB did nothing and promised nothing, and said everyone already knows how the OMT programme operates. Given the terrible macro picture, this was just bad cop to Italy and good cop to Germany.

Eurozone risks Japan-style deflation trap as ECB stays tightThe Telegraph
The ECB has cut its eurozone growth forecast to minus 0.5pc this year and warned of glacially-slow recovery in 2014, but refused any fresh stimulus to mitigate the slump.