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Thursday, March 6

6th March - ECB Meeting

The interest rate decision will be announced at 12.45 GMT, the press conference will begin at 13.30 GMT and the video feed can be watched here. The introductory statement will be posted here shortly after its presentation.

After the break, here are the ECB previews:

The European Central Bank Remains on HoldPIIE

Draghi weighs up measures and monetary policyTradingFloor
Opinion is divided but the ECB might announce it is ending sterilisation of the SMP programme, thus introducing quantitative easing through the kitchen door, with Germany's blessings.

The Eurozone credit crunchCoppola Comment

ECB Thursday – Stick or Twist?WSJ

Unsterilised ECB?Reuters

Deflation and the ECBCoppola Comment
I argued for unwinding of the Euro. That is still my position. But the Euro is what we currently have, and deflation is what we currently risk. The ECB must act, and politicians in the Eurozone must allow it to do so. Treaties be damned.

ECB preview: Action! but not in the shape of a rate cutTradingFloor
Mads Koefoed: Will the ECB cut or not? Tension is building ahead of the March meeting of the governing council. I expect, however, that the council will keep its rate ammo dry, and instead end sterilisation of the securities markets programme.

ECB, BOE To Stick On Policy. But Debate Heats UpWSJ

What is the ECB to Do?Marc to Market

ECB set to act against low inflation, hold fire on bolder stepsReuters
The ECB is expected to hold off on cutting interest rates on Thursday, opting instead to loosen lending conditions to fight off the danger of debilitating low inflation.

ECB May Repeat Japan Mistake That Triggered Lost DecadeBB
The concern now for economists is that Draghi risks making the same mistake as the Bank of Japan - publicly playing down a deflation threat -- and ultimately may have to introduce quantitative easing.

Nationalbanken preview ahead of the ECB meetingDanske Bank

What Does the ECB’s ‘Sterilization’ Program Do?WSJ
One option that has gained ground in recent weeks is for the ECB to suspend its nearly four-year-old policy of draining funds from euro-zone banks on a weekly basis, a process known as sterilization.

Euro Area — “deflation” versus “lowflation”iMFdirect
So far there is no sign of classic deflation, i.e., of widespread, self-feeding, price declines. But even ultra low inflation can be problematic for the euro area as a whole and for financially stressed countries, where it implies higher real debt stocks and real interest rates, less relative price adjustment, and greater unemployment. Along with Japan’s experience, which saw deflation worm itself into the system, this argues for a more pre-emptive approach by the ECB.

ECB Said to Experiment With Governing Council Meeting MinutesBB
The ECB has started to draft trial minutes of its Governing Council meetings and will experiment with different formats in coming months, according to two euro-region central-bank officials.

Euro Inflation Research No 5: ECB will ease again... and againDanske Bank
We have a strong conviction of additional easing from the ECB.

Why the euro inflation number is worse than it looksMoney Supply / FT
Mr Alexandrovich’s chart shows that deflation is becoming more broad based across the bloc, and in all but one of the eurozone’s largest economies.

Sticking a finger into the ECB’s airalphaville / FT
On the QE front, while BNP remain, if not optimistic, than resigned to it happening it is still hard to see how the barriers to it will be overcome. It’s not that it’s illegal, it’s that reaching a consensus on the practicalities of implementation seem more than difficult while at least a few ECB governors seem to share Karlsruhe’s concerns. Perchance ½ per cent y/y on inflation will do the trick…

The ECB’s French Headache WSJ
France’s deeper problems are structural. There’s nothing the ECB can do about France’s excessively high tax rates, overly large government, surfeit of interventionist policies and red tape. But as long as the French economy remains weak, it will generate downward pressure on euro-zone prices.

The ECB receives another disinflationary warning Sober Look
The German CPI rate came in below expectations. The disinflationary pressures are no longer just about the Eurozone periphery.

Draghi Wins Over the Dinosaurs on OMTWSJ