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Thursday, March 5

5th Mar - ECB Previews

Previously on MoreLiver’s:

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ECB Will Cut Rates To Minus 3%: JP MorganZH

Five Questions for Mario DraghiBB

ECB to fill in the QE gapsReuters

So at what point do we see corporate yields going to zero?FT

Eurozone QE Is Here. What Could Possibly Go Wrong?WSJ

ECB to raise growth forecasts, flesh out bond-buying planReuters

Draghi’s New Era Blighted by Old Woes as ECB Finalizes QEBB

ECB prepares to give details of QE schemeFT
Profit- and loss-sharing, flexibility of central banks and conditionality behind the length of the programme.

ECB preview: The QE beginsTF
Conditionality of length, absorption problem and negative yields

5 Points to Watch During the ECB’s March MeetingWSJ
When Will QE Be Launched * Watch for Signs of Flexibility... * ...And What Will Define Success * How Does the ECB See the Economic Outlook? * What Messages on Greece?

This is nuts, where have all the bonds gone?FT
Bond buying on ECB QE, the Greek loan extension and recent growth data in the periphery has transformed itself into bond hoarding.

Scarcity of bonds could pose problems for the ECB’s QEEuropp / LSE
The ECB should be prepared, then, to pay higher prices for the purchase of government securities in order to meet its goal of pumping money into the financial system of the Eurozone.

This is nuts. But so what?FT
Citi: Is it a bubble?...certainly has all the typical hallmarks of one…But that’s almost beside the point, as we think it will last longer than most people’s investment horizons, leaving them with little choice but to participate. As we see it, the time to exit is the day that the market starts to doubt the ECB’s commitment to buying more.

Why ECB risks running out of ammunitionFT
Constraints lie in 25% issue and 33% issuer limits on bond purchases

What to Expect from the ECBMarc to Market
The operational risks are two-fold.  First, the amount of sovereign bonds that it plans on buying may exceed net debt issuance for some countries.. A second operational challenge will be in the reporting of the purchases.

Eurozone’s march to QE enters its final stagesFT

Draghi’s QE Moves to Starting Line as Outlook BrightensBB

Draghi's Rescue Plan Has Created a $103 Billion ProblemBB
S&P Says Sinking Bond Yields Have Worsened Pension Shortfalls

This is nuts, where have all the bonds gone?FT

A Complete Preview Of Q€ — And Why It Will Fail ZH

ECB to Face Scrutiny Over Greece at March MeetingWSJ

Euro inflation set to increase in February - but to remain in deflationDanske Bank

Vítor Constâncio: Central banks with large balance sheets (slides)ECB

ECB’s Constancio Sees Stock of €4 Trillion Eligible for QE PurchasesWSJ

ECB Preview: Waiting for the QE purchases to startDanske Bank
We do not expect a major market impact. There are still unanswered questions: When will the ECB start buying bonds? Will the ECB buy bonds already yielding negative? How open ended is the QE programme really? Will National Central Banks be limited to buying only their own bonds?

ECB preview: Details, detailsNordea
The ECB’s meeting next week cannot possibly match all the excitement involved in January, but will still be worth following. You should not expect too many further QE details to be revealed, but a few will be in store. Also the market response should be rather muted this time, but the market moves following the actual start of the purchases will be more interesting.

Eurozone’s Future Remains at Risk, Mario Draghi WarnsNYT
Draghi warns the future of the eurozone was at risk unless member countries gave up some independence and created more Pan-European government institutions.

On the ECB running out of bonds to buyGlobal Macro Trading

ECB to pay the priceNordea
The first sovereign QE purchases by the ECB are looming, and have left core bond yields trading in a rather narrow range. Contrary to expectations that the ECB will not find any willing sellers, the initial purchases are unlikely to mark another leg lower in core yields. Such an outcome could actually trigger some profit taking, driving yields up a bit. Additionally, while the regulatory effects on the demand picture are sizable, its effects should not be overplayed, especially in the near term.

Monetary Developments in EZ Jan 2015ECB
Euro area: Further signs of stronger recoveryDanske Bank
Euro zone lending shows sign of turnaround as morale improvesReuters