Posts tagged 'Mario Draghi'

Charting Europe’s Japanification

Some nice charts courtesy of Credit Suisse on Friday comparing European inflationary trends with those of Japan in the 1990s:

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The €1,000,000,000,000 question, revisited

Unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation…

– Mario Draghi, April ECB press conference

Don’t try saying that with a mouthful of peas.

More seriously, spot the caveats. A few members of the ECB governing council have since added to the noise around ECB QE — Nowotny, Mersch, Constancio, Coeure and Weidmann — but we feel better no informed than when the presser ended on Thursday. Read more

ECB rate cut: the analyst reaction

The ECB cut rates unexpectedly on Thursday. While there was market consensus that easing was coming, there was little agreement on the form in which the easing would take place. A cut was seen as stifling the ECB’s future flexibility by taking it to the lower bound and flirting dangerously with negative rates, while further LTROs were seen as potentially constrained by AQR-related stigma.

But the big news from Draghi’s press conference, however, is that the ECB is clearly not afraid of the former, and not necessarily scared of the latter either.

The ECB ended up cutting the main refinancing rate by 25 basis points, whilst reconfirming its commitment to fixed-rate tender full allotment in its MROs and special term refinancing operations, and its three-month LTROs. Read more

How I learned to stop worrying and love (eurozone) deflation?

Okay, so it’s not the first time we’ve heard a positive spin on deflation.

Who can forget the famous last words of Deflation Draghi in June this year? Read more

The value in vague

Greg Fuzesi is quietly fuming. We get a post-holiday presser from Mario Draghi on Thursday and the JP Morgan economist really would like the ECB chief to use the opportunity to expand upon the word “extended” when offering interest rate guidance. Read more

Gaffe TV

Here’s the moment, on Reuters Video on Tuesday (03:54 on the countdown clock) , when Germany’s Asmussen said… Read more

Forward guidance is contagious and the ECB has caught it

From a very dovish Mario Draghi’s press conference following the European Central Bank’s decision to keep its key rates on hold (with our emphasis):

Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. Incoming information has confirmed our previous assessment. Underlying price pressures in the euro area are expected to remain subdued over the medium term. In keeping with this picture, monetary and, in particular, credit dynamics remain subdued.

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ECB is technically ready for negative rates

The Great Draghini has spoken on negative rates, collateral and on volatility:

DRAGHI – HAD AMPLE DISCUSSION OF NONSTANDARD MEASURES
DRAGHI – DISCUSSED NEGATIVE DEPOSIT FACILITY
DRAGHI – TECHNICALLY READY FOR NEGATIVE DEPOSIT RATES, BUT NO REASON TO ACT RIGHT NOW

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Nowotny on Draghi and negative rates: “purple monkey dishwasher”

From Reuters:

LONDON, May 3 (Reuters) 13.04 – The euro pared gains while German Bund futures edged up on Friday after European Central Bank policymaker Ewald Nowotny said the central bank was open-minded about taking deposit rates into negative territory.

Nowotny said he was “astonished” by the market’s reaction to his comments earlier in the day, when he said negative deposit rates were not relevant in the near term.

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Some Draghi for the weekend

Mario’s presentation to EU leaders from Thursday night. Msg: ‘Mind the gap’…

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Fantasy central banking

Like Top Trumps, just not as much fun…

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The Draghi Rorschach test

“Oh, Hollande…” said Mario Draghi as the rest of us wondered if he had or hadn’t entered the supposed currency wars. Or if, in fact, the question was redundant.

The euro’s dive on Thursday was impressive and clearly the result of ECB president Draghi’s comments after the ECB’s rate setting meeting. But whether it was justified or not is very much contested. Read more

They took note.

***DRAGHI “THERE IS NO MORE ELA”***

***WE THINK THAT’S A PROMISSORY NOTES ‘DEAL’***

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Lá Draghi

Draghi follows Mark Carney onto the stage… Read more

The negative rate bluff

Negative rates, as we’ve discussed before, are a funny thing.

On the one hand they can send an immensely powerful message. On the other hand they have the power to seriously and dangerously disrupt core economic mechanisms by magnifying the physical hoarding incentive — this helps to create a negative feedback loop that ultimately crowds out capital and leads to voluntary capital destruction. Read more

Draghi’s ready to get negative

Obvious dovishness + Draghi’s admittance that the ECB is operationally ready for negative deposit rates = that. Read more

Draghi, one for the birds

On Thursday, ECB president Mario Draghi was in Milan to give a speech at Università Bocconi. It’s a charming read, as the policymaker reviews the eurozone crisis in pleasantly digestible terms even by Friday morning standards.

Once the crisis was underway, and sovereign spreads had widened out, a debate started: Read more

About those new ‘Europa’ euro notes…

At Thursday’s ECB press conference, Mario Draghi unveiled plans to introduce a new series of euro bank notes. And there was a little video to accompany the news… Read more

The Hand of Draghi (aka Mariodona)

Let’s go back to May 2005, to a lecture delivered by Bank of England governor Mervyn King at the Cass Business School… Read more

OMT is so 2013

That call might not come this side of New Year.

The market has been waiting for Spain to request its very own Enhanced Conditions Credit Line for quite a while now. It’s the road to OMT. And for a (very) little while just last week while it appeared we were only a weekend away.

But it’s now looking increasingly like we are not gonna get to see any OMT buying at all in 2012. Sad. Read more

Come on Mr Rajoy, make that call…

The markets are reminding the Spanish Prime Minister that he needs to actually request economic assistance — and accept all that that entails — before the ECB will physically buy Spanish paper.

Here’s the 10 year Spanish note on Monday, just as it travelled back up through 6 per cent… Read more

Draghi reinforces negative correlation between convertibility risk and Rally Monkey sightings

Draghi delivered, US private jobs data beat expectations and the rally monkey has thus been coaxed out of his cage:

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Some more Draghi-day prep

Draghi-day is getting a big lead-up. Markets just jerked (and then came back a fair bit) on the back of another tid bit. From Bloomberg (with our emphasis):

European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. Read more

Spain’s funding costs post a Draghi-ing

So, we are days from finding out what the ECB is planning to do… or at least, days away from knowing more than we do now.

But immediate largesse in the bond market isn’t the only bit of help that should be concentrated on. There is still Spain’s bank-bailout to consider and where its costs should ultimately lieRead more

A Draghi leak…

…looks like this:

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He may not be going to Jackson Hole but…

… he still has a few things to say.

From the ECB’s perspective, a strong economic union is an essential complement to the single monetary policy. Building this will require a structured process with correct sequencing. Yet citizens can be certain that three elements will remain constant. The ECB will do what is necessary to ensure price stability. It will remain independent. And it will always act within the limits of its mandate. Read more

Asmussen backs Draghi (updated)

And so to the Frankfurter Rundschau…

Here’s the interview with German ECB director Jörg Asmussen which was helping to compress Spanish and Italian sovereign yields further on Tuesday. His words are being hailed by some (such as the Telegraph’s Ambrose Evans-Pritchard, as a “crucial turning point” in the eurozone crisis. Read more

The Great Draghi Re-think

Maybe it’s because it’s August. Or maybe people got round to reading J Cotterill on the matter. Either way, stocks are up, sharply, and peripheral sovereign yields are down, pretty much across Europe.

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Was Draghi really a disaster?

Convertibility, seniority… “modalities”.

Was it a disaster or not? Anyway here’s the goodsRead more

There be Draghis

Given last week’s declaration that Draghi would do “whatever it takes” to restore the transmission mechanism and Europe with it… what could possibly have led to Thursday’s disappointing ECB action?

Was it that… Read more