ECB QE Monitor
The Fed announced an inflection of its long-term objectives by making the 2% inflation threshold not a high limit, but an average objective over time, i.e. it will not harden not its monetary policy in the event of one-off inflation
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Weekly Market Recap
Last week started off on a strong note, helped by news on Monday of Gilead Sciences’ USD 21 billion acquisition of Immunomedics and chipmaker Nvidia’s USD 40 billion purchase of ARM Holdings. Software giant Oracle reported on …
Investing to pastures green(er)
Some regions of Europe are returning to lockdown – for instance some districts of Madrid badly hit by the second wave of the pandemic. Yet, for now these lockdowns are very different from the ones imposed in March and April:
What won’t be in the strategy review
Key points The divergence between a decisive Fed and a more hesitant ECB is an interesting debate but it hides the fact that on both sides of the Atlantic monetary policy through its traditional transmission channels is facing diminishing returns.
Economic and political backdrop
The US Stocks drifted higher through much of last week, although the catalysts for the move were perhaps harder to identify than usual, and trading was subdued relative to recent months. The week’s busy economic calendar appeared to play some
Big Numbers Alone Make No Proper Monetary Policy
Aggressive interest rate cuts, liquidity provisions and quantitative easing worked well. Buying facilities rather serve as a backstop. Based on a diminishing marginal effect from Large Scale Asset Purchases (LSAP), the Fed might do more for longer to support
Road to Recovery
Credit Continuum Monetary stimulus measures and high levels of cash continue to support spread tightening between now and year end. The rally in credit markets has continued in May given Federal Reserve and European Central Bank support measures and the
ECB QE Monitor
Central Banks: interest rates near zero The Fed kept its interest rates unchanged. The ECB kept its interest rates unchanged. No movement on BoJ interest rates since 2016.
ECB to take next step
Week Ahead Focus: ECB Council meeting, EU Recovery Fund The ECB’s Governing Council is to meet next week. We expect the PEPP purchasing program to be increased by EUR 500bn. While the Governing …
Define ”Big”
Research & Strategy Insights The European Commission “doubled down” on the Franco-German initiative and came out with a bigger quantum for its “Next Generation” package and proposals for new “own resources”. This is politically important. While we are still very
ECB QE Monitor
In March, the ECB activated a “pandemic emergency purchasing program” (PEPP) for a an additional €750bn. In total, the ECB have approximately …
Safe havens and QE in this week’s Top Five
#21 A variety of publications in this week’s Top Five, please see below the best read publications: On the fifth place, Blackrock‘s Weekly Commentary “Europe bond outlook under review“: Including their weekly chart: Neuberger Berman‘s “Asset Allocation Committee Outlook 2Q20”
Big Figures Looking Smaller
The ECB has to deal with a nasty form of circularity: doubts on its capacity to break its self-imposed limits – further fueled by the recent decision of the German Constitutional Court – trigger bond offloading in some of …
Euro area and national quarterly financial accounts
Quality Report 2019 This annual report provides a quality review of the quarterly euro area and national financial accounts. The report fulfils the formal requirement for the Executive Board of the European Central Bank (ECB) to inform its Governing Council
Issues note on liquidity in the corporate bond and commercial paper markets
Issues note on liquidity in the corporate bond and commercial paper markets, the procyclical impact of downgrades and implications for asset managers and insurers The coronavirus (COVID-19) pandemic and the measures necessary to contain it have brought a severe and
Bitcoins, central banks and inflation expectations: a variety of topics in our Top Five
#20 – Top Five Best Read Research on OpinioPro And it’s Saturday again: the day for us to publish our Top Five Best Read on OpinioPro this last week. Populair tags were ‘asset allocation‘ and ‘equities‘, furthermore our event calendar
Market Compass
April 2020 The Covid-19’s economic damages start to be felt, we expect an unprecedented GDP contraction in Q2 in both, Europe and the US. Tentative signs of recovery in China. The policy action in the US has been quick and
Macro briefing: Will the ECB be stopped from any further QE?
The court ordered the German government to ensure the ECB carried out a “proportionality assessment” of its vast purchases of government bonds. Whilst the ECB should be successful in proving that its purchase scheme was necessary and “proportional”, further expansion
Europe bond outlook under review
Weekly commentary A decision by the German constitutional court last week could potentially undermine the independence of the European Central Bank (ECB) – and threaten to fuel fragmentation within the euro area in the long run. This comes as the
The ECB Survey of Professional Forecasters
The results of Q2 2020 ECB Survey of Professional Forecasters (SPF) have to be seen in the context of the outbreak of the coronavirus (COVID-19) pandemic and subsequent mitigation measures. 1 Expectations for euro area inflation, growth and unemployment were
Technical solutions exist but the conflict is about principles
Research & Strategy Insights Most continental European countries have by now relaxed the conditions of their lockdown to some extent or are about to do so. We continue to expect a much better second half of 2020, but we are
Annual Report 2019
2019 marked the 20th anniversary of the introduction of the euro, and support for the single currency among euro area citizens reached an all-time high of 76% in the November Eurobarometer poll.
Who decides on ECB purchases?
Week Ahead Focus: German Federal Constitutional Court ruling, US Labor Market Report, Eurozone public debt This week, the German Federal Constitutional Court ruled on a lawsuit against the purchase of government bonds by the ECB and thus the Bundesbank under
Central Bank Watcher
Rates in lockdown for longer With the outbreak of the coronavirus hitting the global economy, central banks have stepped up to the plate by delivering significant amounts of easing. Official yields are now at or below zero for all developed
The limits of the banking channel
Research & Strategy Insights Flows of new bank loans to the corporate sector reached a record high in March in the Euro area, and the European Central Bank (ECB)’s Bank Lending Survey suggests that credit institutions are planning to ease
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