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31 Mar 2015
Solid pace from the ECB’s bond-buying programme – Danske Bank
FXStreet (Edinburgh) - Flemming Nielsen, Senior Analyst at Danske Bank, reviewed the recent asset purchases by the ECB.
Key Quotes
“The ECB released the weekly numbers for its asset purchases which once again highlighted its rather mechanical approach to the pace since the start earlier this month: the covered bond purchases still stand at EUR2.5-3bn per week, the ABS purchases continue to play a very limited role (EUR0.6bn last week) and the large PSPP programme increased by EUR14.7bn last week (a little down from previous week’s EUR16.5bn)”.
“Thus, the liquidity injection continues at a rapid pace and the settlement of the TLTRO3 last week also contributed to an ample liquidity situation (net EUR72.9bn taking MRO and 3m LTRO into account)”.
“Nonetheless, Eonia has not managed to drop significantly as quarter-end/Easter are having an elevated effect”.
“We expect to see Eonia test the lower bound after Easter (sub -8bp) and to slowly grind towards the floor of – 15/-12bp in the months to come”.
Key Quotes
“The ECB released the weekly numbers for its asset purchases which once again highlighted its rather mechanical approach to the pace since the start earlier this month: the covered bond purchases still stand at EUR2.5-3bn per week, the ABS purchases continue to play a very limited role (EUR0.6bn last week) and the large PSPP programme increased by EUR14.7bn last week (a little down from previous week’s EUR16.5bn)”.
“Thus, the liquidity injection continues at a rapid pace and the settlement of the TLTRO3 last week also contributed to an ample liquidity situation (net EUR72.9bn taking MRO and 3m LTRO into account)”.
“Nonetheless, Eonia has not managed to drop significantly as quarter-end/Easter are having an elevated effect”.
“We expect to see Eonia test the lower bound after Easter (sub -8bp) and to slowly grind towards the floor of – 15/-12bp in the months to come”.