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ECB bonds

ECB Members Show Their Concern About Inflation

Francisco Vidal (Intermoney) | For yet another day, the spotlight is on the words of ECB members. They give their views on their particular vision of the course of inflation, with the consequent impact on the markets. And the latter react by interpreting the statements in terms of the central bank’s speed in withdrawing its stimuli. On Thursday, the Financial Times reported Philip Lane had said privately that they expect…


ECB's president Christine Lagarde

ECB ‘recalibrates’ PEPP for Q4 – December is now key for APP and TLTROs

Annalisa Piazza (MFS) | ECB “recalibrates policy”: Nothing else has changed. Indeed, the rest of the policy announcement was a carbon copy of what we heard back in July. Forward guidance on both rates and QE was confirmed, along with the re-investment programmes. The slower pace of PEPP had been widely flagged by ECB officials over the past few weeks so the announcement was hardly a surprise. That said, the…


ECB night

ECB Meeting: Policy Normalisation Is Likely To Be Slow And Gradual To Enable Ongoing Policy Support

Peter Allen Goves (MFS Investment) | The need to avoid premature tightening by the ECB and the strengthened guidance is supportive for core rates in our view. The strong association of guidance with the inflation outlook will also probably raises the prominence of the projections. Overall, the new guidance reinforces the ECB’s commitment to maintain accommodation to reach its price stability aim. Given that projections remain below target, this means…



ECB bonds

ECB Raises The Bar For Normalisation In The Short-Run, Flexibility Is The Key For Policy

Monex Europe | Today’s announcement by the European Central Bank can be perceived as net dovish in the short-term by markets, as the shift from an asymmetric target to a new symmetric 2% inflation target gives the central bank ample room to run accommodative monetary policy for longer without having to fight markets. Previously, the ECB’s inflation target was set at “below, but close to 2%”, which contributed to the eurozone’s structural issues with low inflation for years. By changing this target to a symmetric target, which means any undershoots and overshoots would be equally undesirable, the central bank moves the bar slightly upwards for inflation before policy is required to tighten.


ECB's president Christine Lagarde

The ECB’s Holistic Approach

Laura Becerra (Caixabank Research) | If we want to get a better understanding of monetary policy decision-making, we must pay close attention to changes in financial conditions. To do this, there is an important initial step: knowing how to measure them.



bank spain

Spanish Banks’ Debt With The ECB Doubles In One Year

Spanish banks’ debt with the European Central Bank, which reflects their gross demand of the institution’s regular financing operations, did not show any change in February and remained unchanged at 261.21 billion euros, exactly the same as a month earlier. However, according to Bank of Spain data reported by Europa Press, the increase is 100.24% compared to the same month of the previous year.


The ECB's decision on interest rates hits the European banking sector

ECB Meets Expectations And Ramps Up Near-Term PEPP Purchases

Monex Europe | With the entire Governing Council agreeing to increase the PEPP purchase pace, yesterday’s message may be more dovish than what markets initially expected, but the ECB continues to leave markets in the dark with regards to their exact reaction function and tolerance towards higher yields. Regarding last week’s data, President Lagarde stresses the impact the large number of redemptions had on putting a cap on net purchases. 


Fed ECB

Fed Memo To The ECB: “My Rates, Your Problem”

Bruno Cavalier (Oddo BHF) | There are two types of central banks in the world. On the one hand, those who believe that the recent rate hike is widely justified. This is the case for the Fed, at least so far. On the other hand, those who think the opposite. This is the case of the ECB, which is exasperated to see European rates rising, not as a sign of a solid recovery, but because of the contagion of the US bond correction.