From
latest to older:
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One year of ECB quantitative easing –
Thomson
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 menu – FT
How To Trade Tomorrow's ECB Meeting – ZH
Deal with the root problem: tackle
non-performing loans – Europp
The ECB’s next move – ABN
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 Meeting – WSJ
As The Euro Time Bomb Ticks Away The ECB Turns
Desperate – Social Europe
ECB Faces Difficult Balancing Act to Revive
Eurozone Inflation – WSJ
Central bank risks
destabilizing banks if it pushes interest rates further below zero
ECB Poised to Ease May Reap Havoc on European
Lenders: Chart – BB
The
ECB May Be Finally Ready To Snap – ZH
These
Are the Options Left in the ECB’s Stimulus Arsenal – WSJ
El-Erian:
The ECB's Dilemma – View
/ BB
Jan
von Gerich: Bonds: Towards no limits – Nordea
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.
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.
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.
Survey shows most
economists see QE boost at March 10 meeting * Investors have already priced in
further cut to deposit rate
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
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.
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.
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?
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
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.
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
Disappointing expectations of a two-tiered deposit rate could lead
to tighter conditions
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
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.