Europe - ECB (May 08 - Dec 25)

[winston]

ECB agrees on new inflation goal

European Central Bank policy makers are said to have agreed to raise their inflation goal to 2% and allow room to overshoot it when needed.

The decision marks a significant change from the previous target of “below, but close to, 2%,” which some policy makers felt was too vague.

The consensus emerged at a special meeting on Tuesday and Wednesday to conclude the ECB’s first strategy review in almost 20 years.

The revamped strategy could give officials the justification for sustaining ultra-loose monetary policy for longer as they strive to reverse years of below-target inflation, which have weighed on the euro area’s economic potential.

Source: OCBC

[winston]

Europe’s central bank could print another $1 trillion.

The ECB has purchased €1.2 trillion ($1.4 trillion) in bonds since March 2020 as part of its pandemic emergency response program.

The central bank continues to snap up bonds at a rate of €80 billion ($94 billion) a month in the name of pandemic relief, with total purchases of €1.85 trillion ($2.2 trillion) authorized under the program.

That's on top of the roughly €20 billion ($24 billion) a month in bond purchases the ECB is making under a separate stimulus program that was initiated in 2014 called the Asset Purchase Program.

Crystal ball: Barclays analysts expect the central bank to end its pandemic bond-buying program in March 2022, assuming that the renewed surge in coronavirus cases doesn't send countries back into highly restrictive lockdowns.

But that doesn't mean the end of stimulus. When the emergency pandemic program ends, Barclays expects the ECB to "significantly" increase bond purchases under the Asset Purchase Program.

Barclays estimates the ECB will purchase a combined €700 billion ($825 billion) of bonds in 2022 under the two programs.

"We expect policy rates to remain at current levels and ECB purchases to continue in some form (via net purchases and reinvestment in 2022, and reinvestment thereafter) beyond our forecast horizon and at least until the end of the 2023 ECB forecast horizon," said the Barclays analysts.

Source: CNN

[winston]

European Central Bank to decide this week on stimulus

Inflation is now at 3 percent in the euro region,

Whatever officials determine about bond-buying for the coming months, this week’s decision is only the first of several likely skirmishes on the future of ECB monetary policy.

Source: Bloomberg

https://www.thestandard.com.hk/breaking ... n-stimulus

[winston]

ECB slows pace of bond purchases

European Central Bank (ECB) announced on Thursday to “moderately” lower the monthly pace of bond purchases under the pandemic program, with the calibration targeted to start in the last quarter of 2021.

ECB’s President Christine Lagarde noted that the economy’s continual rebound would require less monetary support from the central bank, while cautioned that the global spread of the delta variant could still pose a downside risk for the economy.

She also insisted that the slower pace of bond buying does not mean a reduction in stimulus.

Meanwhile, European policymakers left interest rates the same and upgraded their growth and inflation forecasts to 5.0% and 2.2%, respectively.

Analysts agree that ECB’s decision to reduce monetary support is different from other central banks because ECB is not planning to end its bond-buying but only recalibrating the pace.

The pan-European Stoxx 600 index ended flat on the day, down 2.6% since Monday amid fears of a stronger-than-expected hawkish stance by the ECB.

Banking stocks rose 0.2% on Thursday, while the real estate sector led the gains of 1%.

Source: OCBC

[behappyalways]

The ECB Has Launched The Japanization Of Europe... And Now It Cannot Back Down
https://www.zerohedge.com/markets/ecb-h ... -back-down

[winston]

Christine Lagarde Declines Earlier Rate Hike Call: Inflation Likely Steadier This Yr

European Central Bank President Christine Lagarde expected inflation to start holding steady this year and edge down eventually, reported Financial Times.

She declined calls for earlier interest rate hike than the ECB's plan.

Source: AAStocks Financial News

[behappyalways]

ECB Prepares For "March Policy Recalibration", Q4 Rate Hike As DB Says "ECB Pivot Is Here... Buy EURUSD"
https://www.zerohedge.com/markets/ecb-p ... buy-eurusd

[behappyalways]

ECB Hawkish Surprise Sends EU Bond Yields Soaring
https://www.zerohedge.com/markets/euro- ... -purchases

[behappyalways]

Traders Bet ECB Will Raise Rates Above 0% By Year-End For The First Time Since 2012
https://www.zerohedge.com/markets/trade ... -time-2012

[behappyalways]

Lagarde Demands ECB Dissenters Keep Quiet As Central Bank Prepares For Liftoff
https://www.zerohedge.com/economics/lag ... es-liftoff