ECB Watch


Draghi has to do, as well as say, whatever it takes - Richard Portes -> … abdc0.html


Draghi: ECB ready to adjust policy if inflation drops further … ZW20140822

Some speculation that the repo and deposit rate could be adjusted by a further 10 bps.


A 10 bps ECB rate cut next week now seems to be a certainty.

JP Morgan and Nomura have come out saying it will happen. Nomura normally make correct calls. Nomura have said that they are 80% certain that the ECB will cut next week.

Draghi has as good as said the ECB will do something in September. The ECB are not yet ready for QE, so a 10 bps rate cut make sense.

0.05% repo rate here we come. Every little helps in the fight against deflation.


:laughing: You can’t be serious? The base rate has minimal impact on inflation.


Yeah, minimal impact but Draghi needs to do everything that it takes.


Well, counter to popular (read: wrong) opinion a 3% base rate but with a QE commitment on sovereign peripheral debt ‘to keep it within x% of Bunds’ would be more inflationary now than rate cuts.


At what point will it sink into the skulls of the nutters in charge that ZIRP is not just Stupid but actually feeds stagnation and deflation?

Yeah I know, ol’ Sidey has been banging that particular drum since the beginning, the old-time Pinsters are probably rolling their eyes and going “Mad uncle Sidey is ranting about ZIRP again, quick someone distract him or he’ll be droning on all night”.

I still say I’m right and economic orthodoxy is wrong though. :nin


Only when they stop teaching monetarist bullsh1t as if it is science.
Yeah, changing the price of one variable (cost of money at central bank) by a few basis points will heavily impact every station in the real economy! Give me a fcuking break.


QE is more monetarist nonsense… :wink:


BNP Paribas has joined Nomura and JPM saying that the ECB will cut rates by 10 bps next week.


RBS have joined BNP Paribas, Nomura and JPM saying the ECB will cut next week.

Another reason for a 10 bps repo cut is to increase the TLTRO uptake.


ECB takes advice from BlackRock - google translate] -> … 18058.html


Bloomberg: Money Markets’ Record Low Seen Pricing 50% Chance of ECB Cut … -says.html

TD have joined RBS, Nomura, BNP and JPM in saying the ECB will cut on Thursday.


Germany Resists Calls for ECB Aid in Euro Growth Dilemma - -> … gs-in.html


It’s like one of those nightmares where you are powerless to move to save anyone from the oncoming trainwreck.


If the Eurozone is determined to go Japanese I’m well out of it.


Cut 10bps

$130.41 last


Good move by Draghi. This will lower TLTRO costs and should lower some borrowing costs.

Fair play to Nomura for been the first with such an accurate prediction.


Is there a good reason to keep 0.05% or 0.00001% instead of just cutting to zero?


I imagine a rate of zero might present IT problems…


In the UK I believe some banks, who had Bank of England -1% trackers, put it in as 0.01% so their system could handle it