Google Analytics

Wednesday, March 9

Special : ECB Previews

From latest to older:

[graphics] One year of ECB quantitative easingThomson Reuters

5 Questions About the ECB’s Meeting WSJ

More of the same likely, but ECB needs new tricks TF

Deutsche Bank’s Draghi day menuFT

How To Trade Tomorrow's ECB MeetingZH

Deal with the root problem: tackle non-performing loansEuropp

The ECB’s next moveABN AMRO
In this publication: The ECB will very likely deliver monetary stimulus in Thursday’s meeting. Our base case is a 20bp deposit rate cut coupled by steps to cushion the impact on banks. We also expect an increase and extension of QE, which should be facilitated by removing the deposit rate floor for purchases

Preview: ECB Policy MeetingWSJ

As The Euro Time Bomb Ticks Away The ECB Turns DesperateSocial Europe

ECB Faces Difficult Balancing Act to Revive Eurozone InflationWSJ
Central bank risks destabilizing banks if it pushes interest rates further below zero

ECB Poised to Ease May Reap Havoc on European Lenders: ChartBB

The ECB May Be Finally Ready To SnapZH

These Are the Options Left in the ECB’s Stimulus ArsenalWSJ

El-Erian: The ECB's DilemmaView / BB

Jan von Gerich: Bonds: Towards no limitsNordea
As bond yields have fallen ever deeper into negative territory, it has become increasingly clear that the ECB will struggle to fully implement its current bond purchase programme without further changes to the terms of the programme. The removal of the deposit rate as a yield floor for eligible bonds would significantly increase the universe of eligible German bonds, but would probably not change the composition of the actual purchases much at this point.

ECB Preview: Easing Mix in Sight as Draghi Aims to Over-Deliver BB
Expected policy measures include a deposit-rate cut by at least 10 basis points, an increase of 10 billion to 20 billion euros in monthly asset purchases and an extension of the program, economists and strategists say in client notes and interviews. The ECB is also likely to announce downward revisions to CPI and GDP forecasts, which would probably lead to broader consensus among governing council members for more easing.

ECB Preview: Another 'menu' of easing, but will it be enough?Danske Bank
We expect the ECB to announce another menu of monetary policy easing including a 10bp deposit rate cut together with an introduction of a two-tier deposit rate system and a front-loading of the QE purchases. The market reaction to this package is likely to be a small disappointment, but it depends on Draghi’s communication about the tools and the ECB’s forward guidance.

Draghi Aims ECB's Killer Blow in 11th Round Versus DeflationBB
Survey shows most economists see QE boost at March 10 meeting * Investors have already priced in further cut to deposit rate

ECB’s hand may be forced next weekTF
The next ECB meeting to review monetary policy is on March 10 * The Governing Council relies on forecasts prepared by ECB staff * The fall in the oil price will affect these forecasts * A key question is how much further will the inflation projection be lowered

ECB preview: same player, different target, shoot againPictet
The ECB is facing a number of political and technical trade-offs. We expect a comprehensive policy package to be delivered at the 10 March meeting, including some measures specifically designed to support the banking sector. ECB staff projections will be revised lower again, partly reflecting concerns over weaker economic momentum and core inflation. The bigger the ECB’s concerns, the bolder the policy response.

ECB preview: Time to get creative againNordea
More easing at the ECB meeting on 10 March looks virtually certain, but there is uncertainty regarding the measures that will be used. For sure, the fundamentals support the case of further easing and Draghi does not want to repeat the disappointment that took place after the December meeting. We expect to see a more positive market response this time although that will be challenging given the high expectations and the risk that the Governing Council is not ready for any dramatic moves.

Draghi: ECB to Review Stimulus Amid Heightened RisksWSJ

Martin Enlund: FX: a bazooka or an ICBM?Nordea
A plethora of events have triggered improvements in risk appetite and this at a time when macro hedge funds are short risky assets. A hawkish Fed could stop the improvement dead in its track, but not yet. EUR/USD is so far behaving as we hoped, but we are becoming increasingly nervous about how much is becoming baked in from the ECB - a bazooka or an ICBM?

Beware the steepeners in March – scrapping the PSPP deposit rate floor?Nordea
The next ECB meeting is approaching fast and once again we are in a position where markets have built up huge expectations as to what to expect from Draghi. Markets are expecting a cut of at least 10bp, leaving Draghi walking a thin line if markets are not to be disappointed (again). Nordea’s baseline is that curves will steepen, but what if the ECB decides to change the PSPP modalities scrapping the deposit rate floor? We take a closer look.

Euro area: large drop in core inflation delivers the final blow to the ECB – Pictet
Euro-area inflation back below zero, core rate down as well – Nordea
Supercore Inflation Guides ECB as Oil Muddies Price Outlook – BB
Euro area core inflation fell - additional pressure on ECB – Danske Bank
After €670 Billion In QE, Inflation Plunges To -0.2% – ZH

Euro area: Sluggish credit growth encourages further easingNordea
The new figures on bank lending in the Euro area did not show much difference to the earlier months: growth was positive but still weak. If anything, the continuously sluggish credit growth supports the expectations for further monetary policy easing on 10 March.

Euro-Area Disappointments Mount as Inflation Rates Slip Back BB
German, French and Spanish prices all drop in Feb. vs year ago * Inflation data for currency bloc due to be published Monday

Central Bank Fatigue? ECB has plenty of tools Danske Bank

ECB to remove the deposit floor for QE purchases ABN AMRO

Why ECB’s Draghi Needs To Bring Out The Big Guns This Time WSJ
Disappointing expectations of a two-tiered deposit rate could lead to tighter conditions

Options for the ECB to cushion impact of negative ratesABN AMRO
The ECB looks set to cut its deposit rate much further…but has indicated that it wants to take steps to cushion the blow for banks * A tiered rate system seems to be the most likely approach…but a refi rate cut, a new set of TLTROs and a willingness to take on more risk in accepting collateral or in its ABS programme are also possibilities

Is the ECB doomed to disappoint?TF
The recent batch of economic data has been so weak that the European Central Bank's earlier promises to ease further have to be redeemed at the March meeting. Unfortunately so much is already expected that investors could be disappointed in the ECB's timidness.

ECB risks running out of bonds to buy unless rewrites rules Reuters