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5 Jun 2014
The time has come for the ECB - BTMU
FXStreet (London) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ believes that the time has come for the ECB to act.
Key Quotes
“The time for policy action from the ECB has finally arrived after it talked a good game over the last couple of months. As a result, investor expectations for further ECB Monetary policy easing to be announced at today’s meeting are unusually high.”
“At the very least investors are expecting the EB to lower by around 10/15 basis points both thei refinancing and deposit rates moving the latter into negative territory. Investors are expecting the ECB to announce some liquidity providing measures to help reinforce downward pressure on market rates which could include stopping the sterilisation of the assets purchased under the SMP and/or extending the fixed rate full allotment auction procedure beyond June 2015.”
“Additionally, the ECB has also signalled that it is examining options to ease credit conditions including offering a conditional long term refinancing operation and/or purchasing private assets (ABS backed by SME bank loans). For recent euro weakness to extend further after today’s meeting, the ECB will likely now have to meet those high investor expectations and perhaps even hint that more easing is likely later this year.”
Key Quotes
“The time for policy action from the ECB has finally arrived after it talked a good game over the last couple of months. As a result, investor expectations for further ECB Monetary policy easing to be announced at today’s meeting are unusually high.”
“At the very least investors are expecting the EB to lower by around 10/15 basis points both thei refinancing and deposit rates moving the latter into negative territory. Investors are expecting the ECB to announce some liquidity providing measures to help reinforce downward pressure on market rates which could include stopping the sterilisation of the assets purchased under the SMP and/or extending the fixed rate full allotment auction procedure beyond June 2015.”
“Additionally, the ECB has also signalled that it is examining options to ease credit conditions including offering a conditional long term refinancing operation and/or purchasing private assets (ABS backed by SME bank loans). For recent euro weakness to extend further after today’s meeting, the ECB will likely now have to meet those high investor expectations and perhaps even hint that more easing is likely later this year.”