June 5
Live: What Will the ECB Decision Mean for the
Euro-Zone? – WSJ
Join The Wall Street
Journal’s Brian Blackstone and Nell Henderson along with WSJ contributor David
Wessel in a live video Spreecast discussion about the ECB decision, what ECB President
Mario Draghi says in his press conference, how markets reacted and what it all
means for the euro-zone economy.
FX Update: All the fallout from all ECB
scenarios – TradingFloor
How will bond markets react to today's pivotal
ECB meeting? – TradingFloor
Negative ECB Deposit Rate: But What Next? – naked
capitalism
ECB Decision Day – Marc to Market
ECB Decision-Day Guide (In 5 Simple Questions) – ZH
The ECB is about to introduce negative rates.
Can it save the euro? – WaPo
Negative ECB deposit rate: But what next? – Bruegel
The big day arrives – Macro Man
Q&A: The ECB’s crucial vote – FT
The ECB Will Need More Than Negative Rates To
Get Lending Going – WSJ
June 4
The ECB Will Likely
Act, But Is Still Falling Short – PIIE
The increasingly dovish rhetoric from ECB officials has
already been priced in by financial markets. This means that the markets would
react negatively to a failure to act, and that it will be harder for Frankfurt
to surprise investors. A package of smaller actions is thus likely.
ECB preview: Rate
cuts... and then some – TradingFloor
The ECB Governing Council is expected not only to cut the
three key policy rates at the June meeting but also to add some measure of
credit easing, possibly a vLTRO.
ECB Watch: Mario's
moody mixtape of monetary policy – TradingFloor
On the eve of the ECB's latest policy-setting jamboree, the
market's eagerness to discover the true meaning of "whatever it
takes" is palpable. But the blindingly obvious (and painful) fact is that
QE is a gargantuan waste of money.
The Market Says the
ECB Will Act. What to Expect Next – WSJ
What Exactly is in
the ECB’s Toolkit? – WSJ
The ECB’s Negative
Deposit Rate – The Short Answer – WSJ
Easier monetary
policy should be no worry to Germany
– Bruegel
The ECB can and
should make the ABS market happen – FT
Great Graphic:
Borrowing Rates in Europe
– Marc
to Market
The rate that banks charge small and medium businesses in Spain,
Italy, France
and Germany. Italian and Spanish rates fell, though are
still well above French and German rates.
Inflating Deflation:
Confusing Symptoms with the Illness – Marc
to Market
ECB preview: Rate
cuts... and then some – TradingFloor
ECB Watch: Mario's
moody mixtape of monetary policy – TradingFloor
Weakening the Euro,
Easier Said Than Done – WSJ
Lithuania and the
ECB’s governing council – FT
If Lithuania’s
accession goes ahead, from January, only the members of the executive board,
which include ECB president Mario Draghi, will still be able to vote at each
meeting. Under the new system, the number of voters will be capped at 21,
meaning there will be four central bank governors at each meeting who do not
vote.
Weekly Focus: ECB has
the potential to surprise – Danske
Bank
June 3
Draghi Is
"Desperate To Avoid A Japan-Style Lost Decade" – ZH
SocGen on ECB.
Europe needs a 'Big Bazooka', but the ECB is preparing
a peashooter – The
Telegraph
Europe’s high command has convinced
itself the worst is over, and with a little fine tuning by the ECB, decent
growth will return
Markets now expect
shock and awe from the ECB – Sober
Look
Unless we see "shock and awe" from the central
bank, global markets will be quite disappointed.
Napoleon’s Yields No
Comfort to Draghi Fighting Deflation – BB
Europe’s lowest government bond
yields since the Napoleonic Wars are signaling investors want more action from
Mario Draghi.
There’s a Risk the
ECB Will Just Push Deflation Elsewhere – WSJ
It’ll be a relief if the ECB manages to get the euro-zone
economy going again, but not if that growth comes at the cost of slowdowns and
deflation elsewhere.
June 2
ECB preview: Even a
package deal not enough to sustain a bond rally – Nordea
There can be little doubt the ECB will provide a whole
package of easing measures in its meeting on Thursday, including rate cuts,
liquidity measures and a conditional LTRO. Even a whole package of measures is
unlikely to be enough to sustain a core bond rally, and longer yields are set
to see a rebound higher, while the curve will steepe
Whatever ECB Does, It
Won't Deliver Significant Impulse To Real Economy – ZH
http://www.zerohedge.com/news/2014-06-01/whatever-ecb-does-week-it-wont-deliver-significant-impulse-real-economy
An enticing Very Long Term Refinancing Operation from
the ECB – Money
Matters
Targeting your LTRO – FT
Nomura and JP Morgan on different types of LTRO that the ECB
could offer.
Draghi Primes ECB as
Inflation Scarcity Alarms Officials – BB
June 1
The case for a better
functioning securitisation market in the European Union – ECB
Joint paper by ECB & BoE.
Waiting for the ECB
– BNP
Paribas
FI & FX Strategy
- Scandies through the lens of ECB action – Nordea
In our view, the risk that ECB will disappoint markets in a
meaningful way is limited and when a central bank is increasing the amount of
stimulus it’s indeed difficult to end up with the conclusion that it will lead
to negative market effects. However, things like negative deposit rates and QE
is uncharted action in its nature and can nevertheless trigger flows and chain
reactions in asset space that may not be ideal – particularly in the light of
the past years one-sided action in risky assets and fixed income spread-over,
and given the abnormally high directionality these different assets have
exhibited…
May 30
Mr. Draghi–Your
Public Awaits – WSJ
According to a client survey carried out by foreign-exchange
analysts at Nomura this week, 95% expect a cut to the refinancing
rate—currently at a record low of 0.25%–while 90% think the ECB will press
ahead with a negative deposit rate. More than half are expecting some form of
liquidity injection, although just 10% anticipate a QE announcement next week.
In short, hopes are running high.
ECB signals fire up
Eastern European bond rally – FT
ECB and BoE plan to
revive EU securitization, boost investment – Reuters
The ECB and the BoE set out proposals on Friday to resurrect
the European Union's market for asset-backed securities and help the flow of
credit to smaller businesses. -
ECB ready to act to
avoid risks from low inflation: Constancio - Reuters
ECB vice president Vitor Constancio said on Friday the ECB
was not complacent about the risks from a protracted period of low inflation
and would act if necessary.
ECB's Visco warns on inflation drop, euro strength – Reuters
Excessively low inflation in the euro zone should be dealt
with as firmly as high inflation, ECB Governing Council member Ignazio Visco
said on Friday, adding that a strong euro had helped push inflation too low.
May 28
ECB research #5: The end of ECB’s easing cycle?
– Danske
Bank
In our main scenario the ECB takes a significant easing step
and surprises markets at the meeting in
June. This could very well be the end of the easing cycle as
it should lead to higher growth and put upward pressure on inflation. It will
take some time before the impact of the easing is seen and inflation should
stay around the current level until Q4 and only drift slowly upward afterwards.
In light of this the discussion about further easing can continue for some
time.
ECB’s three-pronged strategy: a trident or triage?
– TradingFloor
The consensus overwhelmingly expects the European Central
Bank to introduce drastic monetary easing on June 6. This requires a mix of
policy tools, as single isolated measures would not work. Getting the mix right
and satisfying expectations could prove difficult.
European Bonds Front
Running ECB Setup for Disappointment – Econmatters
The ECB Eyes Danish
Negativity – WSJ
ECB Framework: BEEEP
– Marc
to Market
Next week's ECB meeting could very well prove to be among
the most important events of the year.
It has taken ECB President Draghi's leadership and increased risk of
lowflation if not deflation to forge an apparent consensus at the central bank
that more action is needed.
May 27
Implications of negative rates - the Danish experiences
– Danske
Bank
Draghi spells it out
– The
Economist
Euriborderline
insane? – Macro
Man
Complete the sentence: Mario Draghi is...? – Saxo
TV
ECB obsessed with the EUR strength, missing everything else.
ECB Conference Brings
Policy Clues and Inflation Target Debate – WSJ
At ECB Conference,
Krugman Attacks Inflation Target – WSJ
The case that 2% turns out to be too low a target is quite
compelling, Krugman said.
Krugman gives Draghi some advice – FT
It only took a few hours for Mario Draghi to join the list
of names at Sintra saying no to Prof Krugman’s calls for a higher inflation
target.
Can Mr. Draghi
Actually Do Anything About Inflation? – WSJ
Draghi and the case for securitization – FT
Draghi’s Asset-Backed
Drive Rouses Academic Skeptics – BB
May 26
Draghi Convenes
Mountain Retreat as ECB Contemplates New Horizon – BB
Draghi: Monetary
policy in a prolonged period of low inflation – ECB
Draghi’s Drive for Asset-Backed Action Rouses
Academic Skeptics – BB
ECB research No. 3: Expectations of easing but ECB
will surprise the markets – Danske
Bank
May 23
ECB's inflation
projection, exchange rate and global food prices – Danske
Bank
We think it is almost certain that the ECB will lower its
inflation projection for 2014 and we also expect a slightly lower forecast for
2015, but in our view the ECB will keep its 2016 forecast unchanged at an
already low rate of 1.5%
Risk of
disappointment from the ECB in June remains high – Sober
Look
A negative ECB
deposit rate: “What difference would it make?” – Reuters
May 20
ECB's Mersch says chances for June action grown
substantially – Reuters
There were increasing signs on Monday that the European
Central Bank will add more stimulus to the euro zone economy at its June policy
meeting as inflation remains stuck at very low levels.
Where could ECB interest rates go? – Money
Matters
Combatting the
Crunch: ECB Plans Negative Rate on Bank Deposits – Spiegel
When it meets on June 6, SPIEGEL has learned, the European
Central Bank may implement a negative interest rate for financial institutions
seeking to park their money at the Frankfurt powerhouse.
The move is aimed at spurring loans.
May 19
Former ECB Official
Sees Few Obstacles To QE – WSJ
Euro area deflation
monitor – Danske
Bank
Blogs review: Benign
and malign deflation – Bruegel
As Europe experiences disinflation
and worries about deflation risks, a number of policymakers have advanced the
idea that deflation is not necessarily a bad thing. Deflation, it is sometimes
argued, increases the purchasing power of those with fixed incomes. Deflation
is also good when associated with positive supply shocks as several historical
episodes suggest.
May 18
Charting Europe’s
Japanification – FT
Credit Suisse: The lessons from Japan
suggest that policy action in coming months may be critical for a recovery in
inflation.
Secular Stagnation in
the Euro Area – Krugman
/ NYT
Europe is extremely likely to have a
significantly lower natural real rate of interest heading forward than it had
in the past. This in turn suggests that it’s a really really bad idea to let
inflation drift down, whether or not it turns into outright deflation.
Does the Euro Zone
Need Deflation? – WSJ
Ultimately, euro-zone governments are likely to backslide on
their treaty obligations if, as seems likely, the ECB fails to trigger
significant growth. In which case, they’ll be glad if deflation allows them to
sell vast quantities of debt.
DBW: ECB negative
deposit rate edition – FT
The most discernible impact of a negative deposit rate in
the broader financial markets may well be an intensification in the hunt for
yield.
The ECB should do QE
– voxeu.org
As banks repay their loans from the Long-Term Refinancing
Operation, the ECB’s balance sheet is shrinking. This column argues that, given
the slow recovery and sustained low inflation, the ECB should replace its bank
lending programme with quantitative easing. Buying short-term government debt
would be consistent with the ECB’s inflation target, would keep the ECB’s
monetary policy separate from its role in bank supervision, and would create a
built-in exit strategy from unconventional policy.
Japan Privately Questioning ECB’s Currency Rhetoric – WSJ
Japanese officials are privately voicing their frustration
at Europe’s attempts to talk the euro down against other
currencies, a move some of them see as hypocritical.