Europe - ECB (May 08 - Dec 25)

[behappyalways]

Euro Weakens, Fragmentation Fears Rise As Hawkish Lagarde Promises Bond Bailout
https://www.zerohedge.com/markets/euro- ... nd-bailout

[winston]

Holzmann backs big ECB hike in fall if no inflation improvement

The European Central Bank will raise rates by a half-point in the fall, after July’s planned move of half that size, if the trajectory for consumer prices doesn’t improve, according to Governing Council member Robert Holzmann.

While a big increase would have sent a stronger signal as policy makers battle record inflation, “it was good first to test with a smaller step,” said Holzmann, who heads Austria’s central bank.

“But if the situation doesn’t change or deteriorates, then in September a bigger step will be implemented.”

Holzmann spoke a day after the ECB unveiled its plan for rates, which amounted to a win for the Governing Council’s hawkish contingent, of which he’s part. He said markets reacted very well to Thursday’s announcements by raising bets on higher borrowing costs. The ECB also outlined sustained increases beyond September.

“A rate journey always starts with a small step,” Holzmann told reporters in Vienna, echoing similar remarks from ECB President Christine Lagarde a day earlier. He put estimates of the neutral rate of interest, which neither stimulates nor slows the economy, at about 1.5 percent.

Source: Bloomberg

https://www.thestandard.com.hk/breaking ... mprovement

[behappyalways]

European Central Bank to create new tool to address fragmentation risk and temper bond rout
https://www.cnbc.com/2022/06/15/emergen ... risk-.html

[behappyalways]

EU 'Fragmentation' Eases As Details Of ECB Bailout Plan Leak
https://www.zerohedge.com/markets/eu-fr ... -plan-leak

[winston]

Lagarde: Europe Faces High Risk of Abrupt Correction in Financial, Housing Mkts

Europe is facing a high risk of an abrupt correction on the continent's financial and housing markets, while the risks to financial stability have significantly increased since the beginning of this year, said Christine Lagarde, European Central Bank (ECB)'s President.

On another note, Lagarde reiterated to the European Parliament that the ECB is planning to raise the interest rates by 0.25% next month and introduce another rate hike in September.

Related News: EUR Rises as ECB Will Hold Special Meeting on Mkt Condition

Source: AAStocks Financial News

[winston]

ECB readies risk tool amid warning of abrupt correction

The economic situation in the eurozone is becoming more worrying amid the widening fiscal deficit while a new crisis-fighting tool that involves bond-buying and selling other securities at the same time, to neutralize any interventions in debt markets, would address fragmentation if the risk arises.

The new crisis-fighting tool is likely to feature purchases of debt from more highly-indebted nations.

The measure is meant to be finalized before the ECB's governing council next policy meeting on July 20-21.

Lagarde restated officials' intention to raise interest rates in July and September.

Source: AP

https://www.thestandard.com.hk/section- ... correction

[behappyalways]

There is no new tool and there won't be a new tool. The ECB can use an existing QE tool to buy unlimited amount of sovereign bonds or not. It's a choice, not a new tool.

The ECB Has A Huge Dilemma: Price Stability Or Bail Out Nations
https://www.zerohedge.com/markets/ecb-h ... ut-nations

[behappyalways]

ECB Will Buy Italian, Greek Bonds Using Proceeds From German, French Bonds To Avoid Crash
https://www.zerohedge.com/markets/avoid ... ench-bonds

[winston]

Germany objects to aid for indebted ECB states

Bundesbank President Joachim Nagel objected to the European Central Bank's promise of fresh support for the bloc's indebted south at an emergency meeting last month, reviving a divide between the ECB and its biggest shareholder, sources familiar with the matter told Reuters.

ECB policymakers pledged to buy more bonds from debt-laden countries at an unscheduled meeting on June 15, to contain a widening spread between their borrowing costs and Germany's as the central bank prepares to raise interest rates.

But Nagel disagreed with that decision, arguing that the ECB's focus should instead be on fighting high inflation, said three sources.

The virtual meeting was called with only a few hours' notice, meaning governors had little time to review preparatory documents and not all of them could attend.

ECB policymakers who have spoken since the meeting, including Belgium's Pierre Wunsch and the Netherlands' Klaas Knot, two key policy hawks, have backed President Christine Lagarde's pledge to fight fragmentation. This meant that Nagel's opposition was unlikely to prove an insurmountable hurdle.

Source: Reuters

https://www.thestandard.com.hk/section- ... ECB-states

[behappyalways]

ECB Launches "Lift Off" After 11 Years: Hikes 50bps As It Also Unveils italy-Specific QE
https://www.zerohedge.com/markets/ecb-l ... pecific-qe