Tagged: ECB

Exit ECB, stage right. Curtain falls.

So now we know. Draghi couldn’t have put it more bluntly: “we should get used to a period of higher volatility”. “The Governing Council was unanimous in the need to look through this”.  This is significant. It means: 1. The ECB will not be using their QE to smooth out spikes in bond yields. They…

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Enter the ECB, Stage Left

Which of these two charts will matter most for the ECB today? 1. Bund yields continue to climb, even after the Coeure comments two weeks ago that they might do more QE ahead of the less liquid summer months [not helped by the revelation the ECB actually bought less in the week of those comments]: 2. European 5y5y…

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Now you’re gonna believe us! The Draghi edition

The new piece of information we received from Mr. Draghi yesterday is that the ECB won’t buy bonds with yields below the depo rate, currently -20bp. With only Germany 2yr yielding there, this gives them plenty of room to buy almost anything, but more importantly it means they will HAVE to buy almost anything. They’ve got…

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Rubicons and Shibboleths

Let us not shrug off last week’s action by the ECB – by putting forward a bold quantitative easing programme they have crossed the rubicon. It was said it could never be done; that European politics would never allow for it; that Mario Draghi would never get consensus, or that if he did, it would…

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All change please, all change

Canada’s surprise 25bp interest rate cut yesterday is significant. Not just because it had a big impact on the markets, but also because it shows the shift that is taking place since OPEC’s decision not to increase production at the end of November. Two months is not a very long time in central banking terms, but…

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