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Thursday, April 3

3rd Apr - Special: ECB Meeting

Previously on MoreLiver’s:

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Monetary policy decisionsECB

Introductory statement to the press conferenceECB

ECB Keeps Rates on Hold as Officials Discuss New MeasuresBB
ECB kept interest rates unchanged even after inflation in the euro area weakened to the slowest pace in more than four years.

Draghi Says Officials Debate QE to Fight Deflation RiskBB
Mario Draghi said the European Central Bank is ready to move deeper into uncharted territory in the fight against deflation, with policy makers debating what form of quantitative easing they might need to use.

ECB says ready to act if 'lowflation' lingers too longReuters
ECB opened the door on Thursday to turning on its money-printing presses to boost the euro zone economy and keep inflation from staying too low.

ECB Remains All Talk, No Action: Leaves All Rates Unchanged ZH
All talk, no action. That's what, as usual, happened at the ECB today where after much bluster and QE rhetoric from everyone including former permahawk Jens Weidmann, the ECB did precisely as most had expected. Nothing.

ECB Does Nothing. Yada, Yada, YadaMarc to Market
In the face of falling, inflation and weakening financial conditions, despite the end of the economic contraction, the ECB stands pat and only offers a reiteration of its threat of some unspecified action if needed. 

5 Takeaways From Mario Draghi’s ECB Press ConferenceWSJ
No action but tough talk * QE is firmly on the table * Blame it on Easter * ECB eyeing the euro * Back off, IMF

ECB hints at QE, but it is really in troubleTradingFloor
The ECB left rates unchanged and presented no new measures, but revealed unanimous support for unconventional easing. That will be easier said than done.

This is How Mario Draghi Does a Putdown WSJ
Mr. Draghi was explaining to reporters why the ECB’s governing council had decided to take no action in response to a decline in the inflation rate to 0.5%, a quarter of the rate it targets. It’s a job he does well…

Euro the one that they want, Central Bank reserve editionFT
Why is the euro so strong? There are plenty of reasons, but one additional factor has been confirmed by the latest data on global foreign exchange reserves: central bank buying.

Great Graphic: ECB Staff Forecasts of CPIMarc to Market
The ECB staff has been consistently over-estimating inflation and they are at risk for doing so again.

No ECB easing despite fear of stagnationDanske Bank
Hence, it seemed that Draghi tried to use his old strategy of verbal intervention but it had only
a marginal market influence. Could it be that markets are starting to get tired of soft words and now want action?

ECB meeting - The art of doing nothingMerkelnomics
From here on, a further verbal stepping up seems impossible. In a way it’s a gamble, either the recovery continues and inflation picks up again, or the ECB will have to act in June, even if it’s only a small refi rate cut.

Immobile ECB 'playing with fire' as deflation draws closerThe Telegraph
ECB president Mario Draghi reveals 'there was a discussion of QE' but fails to take action once again

ECB addresses the zero lower boundFT
The risk of prolonged inaction in the face of low inflation or mild deflation has now been sharply reduced. Furthermore, Mr Draghi’s increasing emphasis on the exchange rate as a key component in the ECB’s assessment of medium-term inflation makes it far less likely that the euro will be allowed to rise further without running into a policy response from the ECB.

Draghi QE "Reflection" Drops Euro, Pops Bonds/StocksZH
Europe Stocks Little Changed as Draghi Reiterates PledgeBB
Italian Yields Drop to Eight-Year Low on ECBBB


Draghi Builds United Front for New Push Against Deflation BB

ECB Decision Day Guide From Low Inflation to Quantitative Easing BB
ECB Preview: Expect More Talk And No ActionZH

ECB and BeyondMarc to Market

The ECB should focus on the threat of deflation rather than maintaining austerityEuropp / LSE

Is there a risk of deflation in the euro area?Bruegel

Reasons to do nothingMacroScope / Reuters

ECB preview: it could be a boy or a girlTradingFloor
Mads Koefoed: Another drop in inflation has the rate cut drums going in the euro area ahead of the ECB meeting. While I expect rates to stay unchanged, it is with less conviction than in previous months. Other types of action are also a possibility.

Hardy: ECB could come up with "dovish surprise"TradingFloor
ECB decision coming up and the markets are hesitant as economists weigh up the likelihood of action from the European Central Bank.

ECB takes zero tolerance stance on banks' health check complaintsBB
ECB will push banks to the limits with data requests for its upcoming review of their books and insist on common treatment for all 128 banks, it told Reuters, signaling it will not give way to complaints raised by lenders.

Draghi’s Attempt to Talk Down Euro Lost on TradersBB
As far as currency traders are concerned, it’s going to take more than words for Draghi to weaken the euro.

ECB’s Constancio Says No Deflation Seen as Recovery GainsBB
The euro area will probably avoid outright deflation as a “soft” economic recovery gradually reduces spare capacity in the economy, ECB Vice President Vitor Constancio said.

Draghi Europe Scenario Points to Lowflation Still PainfulBB
For all the fears of a Japan-style era of deflation, a more likely threat for Europe is what IMF officials are calling lowflation.

ECB Preview: The balance is set to tilt to more easingDanske Bank
We see the odds slightly in favour of further ECB easing this week. The Governing Council has discussed more easing at the latest ECB meetings and we think the balance will tilt this time. Our main scenario is a small refi rate cut to 0.15%.

EU's Rehn worried about possibility of prolonged low euro zone inflationReuters

Is Wage Growth a Wild Card in ECB Thinking?WSJ
ECB policymakers have often said that the ECB shouldn’t react to single changes in the inflation rate, but rather should see if lower inflation rates translate into lower wages or price expectations.

PMIs Give ECB Excuse To Stay PatWSJ
Recent history suggests the ECB will only move in the case of an emergency. President Mario Draghi promised to do “whatever it takes” to save the euro when crisis threatened to overwhelm the single currency in the summer of 2012. But since then, the details of quite how far the ECB might be willing to go to meet its promise have been clouded.

ECB and US Jobs Dominate the Markets Next WeekMarc to Market
ECB: The tone of official comments has turned more dovish and the BBK appears to have eased its opposition to QE. However, the ECB still refuses to recognize risks of deflation and sees "light at the end of the tunnel"… Surveys suggest an overwhelming majority do not expect the ECB to cut rates. Jobs: The shift in the Fed's forward guidance may encourage a change in the market's focus. We suggest that average hourly earnings may be of greater importance than the market often attributes to it.

ECB room for manoeuvre capped despite growing disinflation threat TradingFloor
Juhani Huopainen: Realised inflation continues falling, but the ECB may find the options available in its toolbox to effect any change is limited. As ever, it should be able to draw on a large reservoir of excuses, but its credibility is in danger of running out.

Why is the ECB hesitating on monetary easing?Sober Look
Ultimately the ECB could be right and some day, as the banking system is "restructured", the Eurozone's economy will heal itself. But that was also the attitude in Japan years ago when the nation undertook its banking reform. Yet deflation in Japan persisted for years since then, becoming heavily entrenched in the economy. Is the ECB now willing to take that chance?

Spain, the ECB and the power of talkForbes
Frances Coppola: I do not expect the ECB to do any significant easing at the moment. But that doesn’t mean they won’t continue to talk about it. After all, signalling has worked well so far.

Euro zone banks slow crisis loan returns as extra cash fallsReuters
The pace at which euro zone banks are repaying their crisis loans to the European Central Bank has slowed significantly as extra cash in the system reaches critically low levels.

Why Draghi might wait, despite shock eurozone inflation newsTradingFloor

German fin min expects ECB rates to rise: Der SpiegelReuters
ECB's Weidmann says euro zone not in deflationary cycleReuters

Citi: Why Does The Euro Refuse To Go Lower?ZH

Draghi vs. Todd on the future of EuropeCraig Willy
Mario Draghi gave a big speech at Sciences Po Paris [this week] explaining what mistakes were made in the euro-boom and euro-crisis years. It makes a lot of interesting points and is almost Kruschev-like as far as regime self-criticism goes.