Europe - ECB & BOE 01 (May 08 - Nov 11)

Re: Europe - ECB & BOE

Postby winston » Thu Sep 01, 2011 5:53 pm

Spain's Treasury is looking to sell 3-4 billion euros of the paper at its first auction since August 4.

Regular buying of Spanish and Italian bonds in recent weeks by the European Central Bank has kept yields on their 10-year benchmark bonds around 5 percent.

Source: Reuters
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Re: Europe - ECB & BOE

Postby winston » Fri Sep 02, 2011 2:32 pm

ECB's Coene says crisis heading to 2008/9 level: report

BRUSSELS (Reuters) - The problems of liquidity and confidence in Europe are not as severe as during post-Lehman crash, but are heading in that direction, ECB Governing Council member Luc Coene said in an interview published on Friday.

"The chief problem in Europe is that of liquidity," Coene, who is governor of Belgium's central bank, told French-language daily newspaper La Libre Belgique.

"The banks have again lost confidence and so lend less to each other. The situation is not as bad as in 2008-2009, but you see that it is going little by little in this direction."

Coene said this concern stemmed from continued uncertainty regarding the bailout plans, particularly for Greece.

However, Coene said that one should not forget political engagement for the plans, which was "very firm."

The European Financial Stability Facility, he said, was an effective instrument to deal with the crisis, but was still in formation. Uncertainty remained over the issue of collateral, as demanded by Finland, and the participation of banks.

Source: Reuters US Online Report Business News

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Re: Europe - ECB & BOE

Postby winston » Sun Sep 04, 2011 7:06 pm

Rate hikes shelved as ECB battles debt crisis

The European Central Bank is likely to signal a halt to its rate hike cycle at its meeting on Thursday, economists said, as the debt crisis undercuts growth in the 17-country eurozone.

Following two controversial rate increases in April and July, some even expect a reversal in policy with interest rate cuts in the coming months, after core economies France and Germany reported a sharp slowdown in growth.

Other analysts believe however that the ECB will keep rates on hold for the foreseeable future, if only for consistency's sake.

In London, the Bank of England also meets Thursday but economists expect no no change there from its record low lending rate of 0.50 percent as the country grapples with the effects of a global slowdown.

In Frankfurt, governors meeting at the ECB's Eurotower will have a raft of disappointing economic data to digest, including a measly 0.1-percent gain in German GDP while neighbouring France failed to grow at all.

ECB President Jean-Claude Trichet will also be bracing for tough questions about the bank's unconventional and controversial policy of buying the bonds of distressed eurozone countries such as Spain and Italy.

Source: AFP Global Edition

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Re: Europe - ECB & BOE

Postby winston » Mon Sep 05, 2011 9:49 pm

ECB ha already spent EUR129b on their bond buying program.

Source: CNBC
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Re: Europe - ECB & BOE

Postby winston » Thu Sep 08, 2011 8:11 pm

ECB Holds Rates as Recession Fears Mount

FRANKFURT (Reuters) - The European Central Bank held interest rates at 1.5 percent on Thursday and is likely to indicate that a policy tightening cycle it began in April is on hold in the face of growing evidence the euro zone’s economic recovery is losing momentum.

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Re: Europe - ECB & BOE

Postby kennynah » Thu Sep 08, 2011 8:52 pm

BoE held 0.5%
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Re: Europe - ECB & BOE

Postby winston » Sat Sep 10, 2011 10:53 am

The market is not logical. With Stark gone, the ECB is free to continue buying government bonds and reducing the yield of those bonds, which is good for Equities.

Early losses on Wall Street accelerated after the unexpected news that the
European Central Bank's chief economist, Juergen Stark, resigned "for personal reasons".

Stark, a German, had been a sharp critic of the ECB's controversial program of buying government bonds of deeply indebted eurozone countries like Greece, Ireland, Portugal, Spain and Italy.

Source: Reuters
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Re: Europe - ECB & BOE

Postby kennynah » Sat Sep 10, 2011 10:44 pm

imo, it is a correct move to stop buying these bonds... continuously lending to one who is no longer solvent is not the answer... it is like someone who cash advances on his credit card so that he can pay the interests and minimum payment, without the income to actually pay off his debts...even if he becomes so frugal as to only have 2 slices of bread each day. this austere behaviour will never pay off his debts.

so, it is the same argument here, ECB and IMF are not helping these debt ridden nations by lending them more money, they are in fact worsening the debt situation... but clearly, there are other surreptitious agenda for the incessant bond purchases..
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Re: Europe - ECB & BOE

Postby winston » Sun Sep 11, 2011 5:58 am

I agree with your assessment.

What I'm saying is that the market is not behaving logically. With Stark gone, the ECB can buy their bonds, which is good for Equities in the short term.

Or are the markets behaving logically, as they could be looking at things on a longer term basis and realized that the bond buying is not sustainable ? :?
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Re: Europe - ECB & BOE

Postby winston » Thu Sep 15, 2011 1:14 pm

ECB lent money to two unnamed banks.
Soc-gen says it's not them.

Source: Bloomberg
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