Link Securities| In an interview for the US portal CNBC, ECB President Lagarde said yesterday that the central bank is still on track to cut interest rates in the short term, subject to any major shocks. She said they are observing a disinflationary process that is proceeding in line with their expectations. He added that they just need to build a little more confidence in this disinflationary process, but if…
Banca March: tomorrow, March 27th, the ECB and European banks will face the last large maturity of the TLTROs (“Targeted Longer-Term Refinancing Operations”) for an amount of approximately €216 billion. According to our estimates, this maturity will represent a reduction in the balance sheet of around -1.6 p.p. in terms of GDP, and will leave an outstanding balance of €177 billion (8% of the programme’s initial amount). It is important…
Mirabaud: To no one’s surprise, the European Central Bank (ECB) has decided to keep official interest rates unchanged and has sent out a clearly pessimistic message. Inflation is expected to fall more than expected – it may not even reach 2% in 2026 – and economic growth is expected to be very limited: according to the latest ECB forecasts, gross domestic product (GDP) will grow by barely 0.6% this year….
Banca March: The monetary authority presented total losses of €7.9 billion in 2023, which, offset by the €6.6 billion of accumulated provisions in recent years, have resulted in this loss of €1.3 billion in profits. The reason for these results is due to the rise in interest rates, which has increased the payment to the national central banks. In fact, the net interest expense has risen from €900 million in…
Intermoney| The ECB released on Tuesday its December consumer inflation expectations, a figure that offered mixed signals, something that could be partly caused by the fact that it has almost doubled its monthly survey of the countries it surveys. The figures include responses from five more countries (Ireland, Greece, Austria, Portugal and Finland) in addition to the six that have been surveyed since the survey began in 2022. That means…
Peter Goves (MFS Investment) | As widely expected, the ECB kept all three of its policy rates on hold at the January meeting. The deposit rate therefore remains at 4% and it has been held at this rate since September 2023. We would agree that the longer rates are held at such restrictive levels, domestic demand will remain subdued and (core) inflation will continue to fall. Today’s meeting affirms our…
Alphavalue /Divacons| According to Reuters, citing sources familiar with the matter, the ECB has reportedly asked some European banks to detail their credit exposure to the Catalan blood products company. Grifols had a net financial debt of €9.5 billion, according to data published in September, with a maturity of €1.8 billion in 2024. According to LSEG data, banks with credit exposure to Grifols in our coverage include BNP Paribas, Santander,…
BancaMarch: Members of the ECB Council expect the new inflation projections published next March to be revised downwards. The current December forecasts foresee 2.7% in 2024 and 2.1% in 2025, without breaching the 2% red line until 2026 with expected inflation of 1.9%. However, the ECB indicates that these data could be more favourable, reaching the target level as early as 2025. While this is good news, the monetary authority…
Ulrike Kastens (DWS) | Eurozone inflation fell surprisingly in November. The increase in the cost of living was only 2.4%, down from 2.9% in October, its lowest reading since July 2021, according to Eurostat’s flash estimate. Across Europe, falling oil prices and easing gas and electricity prices had a notable impact. The energy price component fell by 11.5%. Food prices, on the other hand, hardly eased the situation. In this…
Banca March: The European Central Bank will consider ending bond buybacks to accelerate balance sheet reduction. As announced by Christine Lagarde at the European Parliament Hearing, it is expected to tighten monetary policy by reducing bond purchases next year. The €1.7 trillion Pandemic Emergency Purchase Programme (PEPP) provided for the reinvestment of asset gains until the end of 2024. However, the debate has opened up between the hawks, who defend…