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Wednesday, October 2

2nd Oct - ECB Special

Previews on today's ECB-meeting. I will update this post later.

Live webcast of the press Q&A

Press release Monetary policy decisionsECB


Live blog: Draghi on ECB monetary policyMoney Supply / FT


2-October AFTER

Introductory statement to the press conferenceECB

EUR Soars Despite Draghi's "Weak, Fragile Recovery" JawboningZH

Draghi Not Particularly Dovish TodayActionForex

The ECB Takeaways: Monetary Arsenal is Still on the TableWSJ

Draghi Sticks to Stance--Ready to Do More if NeededMarc to Market

Draghi ready to consider all available instrumentsNordea

Waiting for the cutThe Economist

Draghi not particularly dovish todayDanske Bank (pdf)
There were no new measures and no promises. The likelihood of a new LTRO has diminished. 

2-October BEFORE
What to Expect From the ECB TodayWSJ
Analysts expect the ECB to stand pat and keep its main lending rate at 0.5%, a record low, for a fifth-straight month. Officials in recent weeks have raised the possibility of making additional long-term loans available to banks, but most economists think that won’t happen until later in the year.

Danske DailyDanske Bank (pdf)
Focus on politics in both the US and Italy. While we will likely have to wait before anything new happens in the US deadlock, today Italy’s prime minister is expected to win a vote of confidence in parliament. Italian markets rallied strongly yesterday as Silvio Berlusconi – the man who has been the main cause of trouble in Italian politics the past years – faces a major defeat... ECB will also be in the limelight today. We do not expect a rate cut or new measures from ECB but focus will be on signals on how high the bar is for ECB to provide new stimulus, such as a new 3Y LTRO.

Market comment: ECB to talk LTROsNordea
ECB meeting with focus on LTROs * Italian Fight Night * Market complacency to the US shut down * VAT hike in Japan

ECB:  Much to Discuss, but Little Action Marc to Market                

ECB Watch: Why another LTRO? Nordea
The case for a new LTRO will be the focal point of Wednesday's ECB meeting. Thus, this month's ECB preview has been extended with a deeper look at the likelihood of another LTRO

ECB Preview: Nothing but a dovish attitude Danske Bank (pdf)

Eurozone's falling excess reserves - is another round of LTRO required? Sober Look

ECB Liquidity-Boost Urgency Seen Fading Even on Cash DropBB
The need for a new injection of cash into the euro area’s banking system may be fading as stress in the region eases. Of 19 economists surveyed by Bloomberg News, 11 said there’s no requirement for another long-term refinancing operation from the Frankfurt-based central bank, even after excess cash in the region’s financial system fell to the lowest level since December 2011.

ECB Preview: Still in the action zoneING (pdf)
Three factors are still disturbing the ECB’s comfort zone: the Fed, higher money market rates, and lacklustre credit growth. Words still seem to be the first line of defence to shield the Eurozone from higher interest rates and a stronger euro. However, the strategy of words without deeds could soon wear out. Consequently, we still expect further ECB action in the next 6 months, with liquidity operations being the preferred option.

Weekly Focus: Politics in the limelightDanske Bank (pdf)
At Wednesday’s ECB meeting focus will be on Draghi’s comments on a possible new three-year LTRO.

Week AheadNordea (pdf)
Eurozone ECB meeting

FX Outlook: No Comfort Yet for Dollar BullsMarc to Market

Euro area credit contraction continues Danske Bank (pdf)
The monthly loan flows show there is no turning point yet…we expect a new LTRO when excess liquidity has declined so much that it pushes the short market rates towards the refi rate, likely to happen late this year or early next year.

Eurozone monetary data supports new LTRO soonTradingFloor
August monetary data for the euro area shows that credit contraction continues. In light of ECB president Mario Draghi's recent promise that a new round of LTRO-loans could be made available to banks here are some of the possible scenarios.