ECB QE could theoretically surpass €2 trillion according to reported program details - page 14

 

EU Preview: ECB Likely to Pause Before Using New Round of Ammo Although the Governing Council of the European Central Bank (ECB) convenes on Thursday for its monetary-policy session, the meeting may be rather uneventful. While the global macro-economic environment is dealing with heightened volatility and uncertainty and the conditions seem rapidly deteriorating, economic experts expect the ECB to stay pat on its current policy for the immediate future.

With consumer prices growth even weaker due to ever declining oil prices, disappointing industrial production data published last week, slowing growth, and the ECB's economic forecasts released in December quickly becoming obsolete, all eyes will be on President Mario Draghi for any hints on whether more stimulus may come in the next couple of months, particularly at the institution's March 10 meeting, when the ECB is scheduled to publish its updated GDP and inflation forecasts.

Draghi and his fellow policymakers failed to satisfy the markets before the end of last year and strengthen the bank's quantitative easing (QE) program. Instead, they opted for more modest measures: a rather timid deposit rate reduction, expanding the bank's asset purchases to €1.5 trillion and extending the duration of the program. Draghi said at the time that he expected inflation to start rising at the beginning of 2016.

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ECB only buy €382m in ABS in latest weekly ECB QE count Here's the ECB QE numbers w/e 22 January 2016

  • Total assets bought last week 14.483bn vs 15.267bn prior
  • Total QE stands at 529.7bn vs 515.2bn prior
  • Total covered bonds 148.9bn vs 146.0bn prior
  • Total ABS 15.8bn vs 15.4bn prior

Last week there were reports that the had up to €1.6bn in ABS buys lined up. Obviously they didn't

 

ECB's Coeure says using fiscal space would speed up Eurozone economic growth Comments out on Reuters

  • would also support ECB's objective of medium-term price stability
  • but in many countries such fiscal space simply does not exist
  • ensuring sound public finances in Europe will also require changes to the EU's fiscal governance framework.
  • lack of compliance with the rules has hampered the Eurozone's ability to deliver an efficient macroeconomic policy stance

Yada yada. More of the same from ECB talking heads.

 

EU Referendum: 'The Clue Is In The Name': Market Implications - Barclays We believe markets may misjudge the UK’s referendum on EU membership in three dimensions: 1) the breadth of its potential impact as a broader European or global risk; 2) the likelihood of a ‘Leave’ vote, particularly the later the date of the referendum; and 3) the likely timing of the referendum and the importance of risk events that will precede it.

Our view is informed by two key aspects of the UK’s vote that we believe are underappreciated: 1) it is a European issue, and hence of global importance, not just a ‘UK’ or ‘GBP’ issue; and 2) its outcome is driven by political economy, not just economic impact.

Immigration is set to be the key ‘wildcard’ driving the referendum’s likely outcome and, with procedural constraints, timing. Because immigration also is the top political issue in the rest of the EU, and a UK exit would set an unwelcome precedent, the EU referendum is at least as big a risk to EU and EMU stability as it is to the UK economy; ie, the clue is in the name.

Immigration’s clear impact on polls appears to explain Prime Minister Cameron’s June referendum push – and increasing receptivity from his European counterparts – before migration flows hit a seasonal peak. A June referendum appears possible only with a deal at a February EU Summit, making February a key risk event.

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ECB says expected path of inflation in 2016 is now "significantly lower" Latest monthly bulletin from the ECB

  • latest indicators are broadly consistent with unchanged pace of growth
  • EZ recovery continuing on pvt consumption but held back by slowdown in export growth

"Supported by the ECB's monetary policy measures and the economic recovery, inflation rates should continue to recover, although risks of second-round effects from the renewed fall in energy price inflation will be monitored closely"

Nothing to set the world alight or that we don't already know

Full bulletin here

 

ECB buys €13,158bn in latest QE count Latest weekly QE numbers from the European Central Bank

  • Prior 14.518bn
  • Total PSP 557.3bn vs 544.2bn prior
  • Total covered bonds 152.9bn vs 150.5bn prior
  • Total ABS 17.7bn vs 17.6bn prior

Another small gain in ABS buys after the bumper week last week when they hovered up 1.8bn

 

ECB's Coeure: Further Easing Possible In March Another boost of Quantitative Easing (QE) is possible and top policy makers at the European Central Bank (ECB) are currently discussing about which assets and how many of them should be bought ahead of the March rate-setting meeting, the bank's Executive Board member Benoit Coeure said Monday.

The ECB's policies are working, but the bank is ready to do more to get inflation to the desired levels, Coeure said.

Thus, he reiterated that the Frankfurt-based central bank was ready to consider other instruments at its March 10 meeting - a hint that was mentioned a number of times by ECB President Mario Draghi himself.

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ECB QE count data: Bought €12.570bn vs €12.718bn prior ECB QE count data week ending 19 February 2016

  • Total QE 582.6bn vs 570.0bn prior
  • Total covered bonds 156.2bn vs 155.1bn prior
  • Total ABS 18.7bn vs 17.8bn prior
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