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HenryTo
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HenryTo
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rffrydr
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 Posted: Tue May 10, 2011 7:19 am Post subject: |
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....which is why that won't happen. The ECB right now is all about changing administrations and honourable rate hikes.
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HenryTo
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| Posted: Mon May 09, 2011 11:43 pm Post subject: |
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Bridgewater on the ECB's monetary policy for the rest of the year:
| Quote: | The ECB and the Periphery
The widening divergence in economic conditions between the periphery of Euroland and the core is putting the ECB in the position of running a monetary policy that may be appropriate for the entirety of Euroland, but is largely inappropriate for its parts. The markets are now discounting that the ECB will raise rates steadily over the next couple of years, and based on ECB comments, this doesn't seem too far afield from what officials themselves expect to do. If the currently discounted rise in interest rates actually happens, we think the impact on the periphery will be devastating. As you know, we suspect that even with interest rates at their current levels, the peripheral countries are insolvent, but with a tightening central bank the pressures will be that much worse and come to a head faster. |
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HenryTo
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| Posted: Thu Apr 07, 2011 11:50 pm Post subject: |
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Bridgewater on the European Central Bank's latest rate hike:
| Quote: | | The ECB raised its target rate by 25bp on Thursday from 1% to 1.25%, in a move that it had hinted at a month ago and as a result that was fully discounted. We believe that tightening policy is sensible at this point, as aggregate conditions for Euroland warrant it. In fact the ECB has been gradually tightening for about a year now, as it has contracted its balance sheet and allowed short-term interbank rates to rise (3-month rates had risen from 35bp to 100bp prior to this tightening move) as shown in the first chart below. Overall conditions for Euroland are not as depressed as they had been during the peak of the crisis, growth is healthy and inflationary pressures are more mixed. So Thursday's decision is only one marginal step in removing some of the extraordinary stimulation put in place during the crisis, and overall policy remains fairly easy. Another 135bp of tightening is priced over the next two years, which would bring rates to a bit over 2.5%. |
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rffrydr
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| Posted: Fri Mar 04, 2011 11:08 pm Post subject: |
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More worrying still, the wage agreements tracking inflation like the bad ol' days. Merkel's political bids are bad but Volkswagen, in a bid as the new toyota, is leading the way.
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HenryTo
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| Posted: Fri Mar 04, 2011 10:08 am Post subject: |
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Not surprising to see the ECB turning hawkish given ECRI's Future Inflation Gauge readings for the Euro Zone:
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Euro FIG At 28-Month High
March 04, 2011
(Reuters) - Euro zone inflationary pressures hit a 28-month high in January, according to a forward-looking indicator released by the Economic Cycle Research Institute .
The Eurozone Future Inflation Gauge (EFZIG), an indicator designed to predict inflation trends, rose to 102.1 in January from 101.6 in December. New York-based ECRI said euro zone inflationary pressures are in a cyclical uptrend, led by Germany, France and Spain.
Official euro zone inflation accelerated to 2.4 percent last month, moving further above the European Central Bank's target of just below 2 percent.
ECB President Jean-Claude Trichet at his monthly press conference on Thursday hinted at the possibility of an interest rate hike as early as April.
Thirty-nine of 49 economists polled by Reuters after the central bank's March meeting said a rate hike from the current record low of 1.0 percent would come next month. |
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rffrydr
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HenryTo
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Location: Los Angeles, California
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HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
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HenryTo
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Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
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HenryTo
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Joined: 06 Aug 2004
Posts: 11260
Location: Los Angeles, California
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| Posted: Thu Dec 02, 2010 6:18 pm Post subject: |
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Axel Weber still hoping (and praying) that the existing bailout packages for Greece and Ireland would "work":
http://imarketnews.com/node/23320 |
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rffrydr
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| Posted: Mon Nov 29, 2010 8:02 am Post subject: |
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RBS on ECB this week:
| Quote: | The big focus this week will be the ECB press conference on Thursday. While the request from Ireland to activate the backstop facility should have provided some relief for the ECB in the pursuit of its exit strategy, given current market conditions – particularly a more severe deterioration and contagion in periphery sovereign debt markets – we believe the ECB is no longer in a position to pursue its exit. If, as we thought, the next stage in the exit strategy was returning Q1 3M LTROs to variable-rate tenders (though still with generous allotment amounts), then a further delay to the exit to March now seems most likely.
As we had argued prior to the Irish bailout, if the ECB returns to 3M variable-rate tenders at a time of continued banking stress, then it risks banks bidding very high rates to secure funding, which would be yet another negative shock for confidence that the ECB would presumably wish to avoid
Even if the Governing Council decides not to push towards the exit and the 3M tenders are unchanged, we expect no new liquidity measures such as a return to special 6 or 12M tenders to be announced. In fact, the ECB will nonetheless effectively continue with its gradual exit by design before the end of the year with the expiry of the last 12M LTRO (the last 6M LTRO matured earlier in November). In the event that the ECB decides to push ahead with the exit strategy next week despite the current environment, then we would still expect the weekly MROs (and possibly the one for maintenance period operations too) to remain at fixed rate, full allotment. The ECB will provide an update of the Eurosystem staff’s macroeconomic projections that will include 2012 mid-point projections for the first time. You can find our detailed preview of Thursday’s ECB meeting in “Revolving door”. |
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rffrydr
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| Posted: Fri May 21, 2010 1:17 pm Post subject: |
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There it is, at the end of the very first question, "I'm more german than you."
http://www.ecb.int/press/key/date/2010/html/sp100521.en.html
In '08 the market was screaming for the government....screaming 777 down on day Congress didn't quite pass TARP. The we laughed at Government Motors and Citi, ward of the state and went on our merry way. Did anyone really believe that would be the end of it? Gold too, was once a "fiat currency."
The central point in Trichet's interview of the primacy of greed over responsibility however is nexus of this current crisis--and the way out. And it's the europeans who are pulling us to that realization. The market derides "utility banks" but falls all over itself to invest in exactly that in china! We already know the way forward. Now we've just got to live with it.
p.s. Trichet's reference to WWI was widely mis-represented and screamed to the heavens in the western press. The germans too are clearly in a haughty mood..
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rffrydr
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