Archives of “european central bank” tag

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Watch: ECB president Christine Lagarde’s press conference at 1330 GMT

  
  Analysis
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All eyes on Lagarde now

The ECB statement was a non-event as expected, with the language on inflation and policy kept similar to the December meeting.

The ECB did officially announce its first strategic review in nearly two decades though and has taken some of the heat away from Lagarde ahead of her press conference; they say that they will provide further details on the scope and timetable later today at 1430 GMT.
As such, the focus of Lagarde’s press conference will be more skewed towards her tone and view on recent changes to the economic outlook i.e. improving data and the US-China trade deal – unless of course she decides to chime in on strategic review questions.
You can watch her live later here:

ECB leaves key rates unchanged in January meeting

  
  Analysis
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The ECB announces its latest monetary policy decision – 23 January 2020

  • Prior decision
  • Deposit rate facility -0.50%
  • Main refinancing rate 0.00%
  • Marginal lending facility 0.25%
  • Rates to remain at present or lower levels until inflation outlook robustly converges to target, reflected in underlying inflation
  • Announces first strategic review of policy since 2003
  • Further details on scope, timetable of review will be due later at 1430 GMT
  • Bond buying to continue until shortly before rates are raised
Pretty much a non-event as the details of the statement is very much a repeat of December – or so it seems, the ECB website link is down – besides the announcement of the strategic review, which was very much expected.
The euro is barely moved on the release as all eyes will turn towards Lagarde’s press conference, which is due at 1330 GMT later.
Update: Here’s the full statement.

“At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.

The Governing Council will continue to make net purchases under its asset purchase programme (APP) at a monthly pace of €20 billion. The Governing Council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.

The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

The Governing Council also decided to launch a review of the ECB’s monetary policy strategy. Further details about the scope and timetable of the review will be published in a press release today at 15:30 CET.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.”

Its European Central Bank policy meeting day – preview

  
  Analysis
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ECB monetary policy decision is coming later on Thursday 12 September 2019

  • announcement due at 1145gmt
  • ECB President Draghi’s press conference (his last one!) is at 1230 GMT
Various previews have been posted in past days, I’ll collate them all for easy reference a little later. But for now, BNZ have a handy summary:
  • consensus among economists is for a 10bp cut to the ECB’s deposit rate and the announcement of a resumption to QE, with the median estimate for a €30b per month pace of bond buying. 
  • The market prices 14bps of rate cuts in for this meeting, implying an almost 50% chance that the ECB could cut by 20bps. 
  • The ECB is widely expected to accompany any rate cut with the adoption of a “tiering” system for bank reserves, whereby some portion of banks’ reserves will be exempted from the negative deposit rate, in order to mitigate the negative financial impact on the banking sector. 
  • The bond market’s focus is likely to be on whether the ECB restarts its QE programme and, if so, what the size of such a programme might be. Despite the recent rise in European and global rates, expectations for the ECB are still high (as evidenced by a 30 year German yield of 0%) and were it to disappoint market expectations on QE, the risk is for an extension in the recent bond sell-off.
ECB monetary policy decision is coming later on Thursday 12 September 2019 

ECB monetary policy meeting today – preview of a live one – and where to for the EUR.

  
  Analysis
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The European Central Bank Governing Council will be dovish today, and may even cut the main rate.

  • 1145 GMT for the announcement
  • 1230 GMT is President Draghi’s press conference
  • Most expect the depo rate to remain on hold at -0.4%, although the probability of a cut (to 0.5%) is priced around 38% … which is not negligible …. this meeting is ‘live’.
Here’s a quick preview from TD:
  • The odds of a dovishly more proactive ECB look twice as high as those of a hawkish disappointment
  • The press conference is key to the ECB’s view on the rate floor, potential QE, low inflation expectations, and reinforcing a “symmetric” inflation target
And, on the euro:
  • With our base case fully priced and EUR weak, we see some scope upside if Draghi delivers as expected.
  • Dovish risks prevail, which could send EURUSD lower into fresh ranges. 
  • Next week’s FOMC may constrain follow-through.
European Central Bank dovish draghi

Dangers detailed for banks in Europe

  
Analysis, Economy, Education
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Despite recent improvements in the health of European banks, they remain vulnerable to a daunting array of hazards that are expected to produce another round of sizable write-offs in the next couple of years, the European Central Bank said.

Its report cataloged in detail the problems facing the region’s financial institutions.

The challenges for banks in the 16-nation euro zone include exposure to a weakening commercial real estate market, hundreds of billions of euros in bad debts, economic problems in East European countries, and a potential collision between the banks’ own substantial refinancing needs and government demand for additional loans, the central bank said.

In its twice-yearly review of risks facing the nations that use the euro currency, the central bank expressed particular concern about banks’ need to refinance long-term debt of an estimated 800 billion euros, or $984 billion, by the end of 2012.

European banks will need to set aside an estimated 123 billion euros in 2010 for bad loans, and an additional 105 billion euros in 2011, the report said. That would be in addition to the 238 billion euros they set aside from 2007 to 2009.

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