Previously on MoreLiver’s:
ECB to Give First Indication of Three-Year Loan
Repayment Today – BB
around noon ECB time (11:00 GMT)?
Europe's Banks to Repay Loans Early. Good News or Not? – BB
PREVIOUSLY
Ten Things You Should Know
about the LTRO – Marc
to Market
The ECB’s 3-year LTROs and the shift in credit
supply – Alea
Payback of ECB Lending
to Mark New Step Back to Normal – WSJ
EURUSD Is Vulnerable Ahead Of
'LTRO Friday' – ZH
Note from
Citi.
Global
Alpha Weekly – Nordea
(pdf)
FX: Safe-havens out of fashion * Fixed Income: Steeper
yield curves a major them in 2013 * LTRO and the early repayment option
LTRO repayment bifurcation risk – alphaville
/ FT
The first
LTRO repayment opportunity is fast approaching. David has already considered
how it may or may not impact European lending rates, including the chances of
Eonia rising significantly if the repayment is larger than expected.
LTRO repayments will be mostly good news – Nordea
(pdf)
Summary here.
FI Strategy – LTRO and the early repayment
option – Nordea
(pdf)
On Friday,
January 25, the ECB will announce the first amount to be repaid of the three
year LTROs. We estimate EUR 200bn to be paid back during 2013, with limited
market impact in the short term.
Eurozone liquidity and
menacing straws – alphaville
/ FT
We've
already opined on the chances that early-LTRO repayment will lead to a drain on
excess-liquidity in the euro-area. But we argued that since it is unlikely to
take more than about €200bn out of circulation, with consensus expecting about
€130bn to be sent back, the effects should be muted. But what if another straw
is soon to be inserted?
The great European bank heist
reversal – alphaville
/ FT
LTRO repayment chat is speeding up the closer we get to the fateful day
at the end of January when Euro-banks might actually start sending back once
cheap cash to the central bank. How much will be repayed, by whom and when are
the questions that need to be answered.
We don’t want your money – Nordea
Banks will have the first chance to repay the 3-year money borrowed from
the ECB on 30 January. Early repayments are likely to lead to expectations that
excess liquidity would fall notably, giving rise to pricing of higher short
rates. However, despite the repayments, plenty of excess liquidity will most
likely remain, keeping short rates very close to current levels.
Weekly Focus: Market focus
turning to LTRO repayments – Danske
Bank (pdf)
Europe IFO,
PMI, Eurogroup/Ecofin meetings * US PMI * China PMI * Japan BoJ meeting
UPDATE 1
UPDATE 1
Banks Return €137 Billion In LTRO Funds To ECB:
Goldman's Take – ZH
ECB Says Banks to Repay More Than Forecast of
3-Year Loan – BB
Bunds fall, euro and bank stocks rise after
LTRO payback – Reuters
Euro Gains After Loan Data as Stocks Rise, Yen
Falls – BB
UPDATE 2
UPDATE 2
LTRO flow – alphaville / FT
That’s
around 30 per cent of the first three-year LTRO being sent back to the European
Central Bank by 278 banks. The second three-year LTRO will become repayable
from the 27th of February, with its initial announcement coming on the 22nd. The
€137bn or so being repaid this time is higher than the market expected, but not
shockingly so.
UPDATE 3
UPDATE 3
Too early to celebrate ECB's balance sheet
reduction – Sober
Look
The
interest rate, being paid by the European banks to the ECB is 0.75%, so one may
rationally assume that no financial institution, in their right mind, would pay
off such a loan for economic reasons. The banks cannot borrow on their own for
three years at this level and so to pay them off early makes no economic sense.
Yet they are being paid off and if it does not make sense economically then it
must make sense for some other reason or reasons.