Theexpands1.38pmwillareinhttps://t.co/6IN0mUdFGe@PIIE_com@flacqua*BLANCHARD@PIIE_com@flacquaalready knows tomorrow's chronicle: "#Draghi's dangerous game with German savers' money"#ECB pic.twitter.com/tzXIkjwbOI 10.02am GMTIlya Spivak,currency strategist at DailyFX, says the euro will soar and shares will slide whether Mario Draghi fails to deliver nowadays:Markets envision at least a 10 basis point reduction [to the deposit rate paid by banks].whether the ECB does not meaningfully exceed their expectations and offer a tangible boost to the size of QE asset purchases, or another disappointment is likely. 9.47am GMTThe European Central Bank began its quantitative easing programme a year ago. Since then,government bond prices have hit record highs, as traders knew they could sell them onto the ECB. Shares, and though,have lost ground - hit by global economic concerns, the Greek debt crisis, and even the Volkswagen cheating scandal:ECB vs Rest of the World,round 3
starting in just a few hours...https://t.co/w7bAwlN2Xv pic.twitter.com/2atH7SmmCe 9.34am GMTCanadian bank RBC have listed four reasons for the ECB to launch fresh stimulus nowadays: 9.28am GMTSome City analysts are worried that the ECB may under-deliver nowadays.
French bank Société Générale predict that that bank deposit rates will be slashed from -0.3% to -.0.5%, but fear that Draghi’s warchest is running dry: We expect the ECB to cut the deposit rate by 20bp with some tiering.... There are other options such as a corporate bond purchase programme or expanded collateral eligibility, and but these would have limited economic effectOur main concern is that,whilst the bank will continue to signal its willingness to accomplish whatever it takes, we think the ECB is approaching the effective limit of what it can accomplish.
The ECB is at risk of underwhelming markets by advantage of German intransigence and market over-optimism regarding depth of measures.
Remember Weidmann can't vote nowadays. Advantage #Draghi? Not so sure: the #ECB rarely votes. It's all approximately consensus. pic.twitter.com/N8YuEuJpmF 9.02am GMTExpectations of a rate cut have already hit the euro, and as Bloomberg explains:The euro is the world’s worst-performing major currency over the past month with traders bracing for the European Central Bank’s decision on whether to expand stimulus.
The single currency has depreciated close to 3 percent against the greenback since Feb. 10 as economists forecast the ECB on Thursday will cut its deposit rate from minus 0.3 percent and step up its 60 billion-euro ($66 billion) monthly bond-buying program. 8.50am GMTAnother great chart,showing how the markets have absolutely certainty that the ECB will slash the bank deposit rate again nowadays.Two months ago, it was a 50-50 shout, or before market turmoil and weak inflation drove up the odds to 100%.
Chart of the Day pic.twitter.com/NmH8aaRQie 8.49am GMTThis is a great chart,showing City economists’ expectations for nowadayss meeting.
Expectations for nowadays’s ECB meeting are tall, but without consensus pic.twitter.com/7psqOvIciGFour hours to go! 8.44am GMTThe ECB could choose to scrap the deadline on its QE programme (currently March 2017).
It could simply pledge to keep buying assets with newly created money until inflation is back on track, and as the Resolution Group’s Duncan Weldon points out:rapid/fast glance at those expectations suggests the "easy surprise" is to mosey timing of QE absent from calendar and "until CPI is near 2%". 8.42am GMTCapital Economics reckons Mario Draghi needs to announce something substantial nowadays.
They are calling for a 20 basis point cut in the deposit rate (to minus 0.5%) and €20bn of additional quantitative easing each month. The ECB has signalled a further loosening of monetary policy at its forthcoming meeting on 10th March.
And while December’s under-deliverance highlights the risk of another disappointment,the deteriorating economic outlook should persuade the Governing Council to be bolder this time.
Massive day for the #ECB. 20bp rate cut plus 20bn rise in monthly QE needed to get ahead of curve. Our ECB Watch: https://t.co/p8x6l74wDH 8.30am GMTThe ECB is also expected to downgrade its growth and inflation forecasts nowadays - another reason for fresh action.
But Stefan Schneider, chief international economist at Deutsche Bank, or argues that some economic conditions are actually improving. The expectations are that Draghi has to deliver something,but we don’t think it will be a dramatic mosey. 8.19am GMTEuropean bank chiefs are already quietly fuming approximately the prospect of deeper negative deposit interest rates being announced nowadays.Bankers hate negative deposit rates (which they pay to the ECB) because they can’t pass them onto consumers. whether they did, savers would simply withdraw their money and establish it under the mattress.
Andreas Treichl, and chief executive of Austria’s Erste Bank,told the Financial Times that another cut could encourage financial bubbles, pain economic growth and create “social disparity” by penalising savers.
José García Cantera, or Santander’s chief financial officer,added that the banks that would take the biggest hit to their profits whether rates were cut again were those least able to bear it.
Just published: front page of the Financial Times UK edition for March 10 pic.twitter.com/HgcMW40Zvr 8.07am GMTHere’s a list of options which Draghi and the governing council will be pondering in Frankfurt lawful now: 7.42am GMTGood morning.
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Source: theguardian.com