Tag Archive: ECB

How Germany Could Upset Europe before UK Referendum

2016-06-17

The assassination of the Jo Cox has broken the powerful momentum in the markets. Investors recognize that the tragedy potentially injects a new element into consideration for the outcome of next week’s referendum. The campaigns will be resume over the weekend, and new polls will be available. Investors will place more weight on polls conducted …

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FAQ: ECB’s Corporate Bond Buying Program Starts

2016-06-06

by Marc Chandler

2016-06-06

In March, the ECB decided to increase its asset purchases from 60 to 80 bln euros a month and to include corporate bonds. The corporate bond buying program begins this week. We use an FAQ format to discuss the key issues. What is the ECB doing? The ECB will buy euro-denominated, investment grade bonds … Continue reading...

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Notes from ECB Press Conference

2016-06-02

by Eugen von Böhm Bawerk

2016-06-02

ECB press conference June 2 2016 Q; Risk to inflation balanced? April meeting, no conclusive evidence of second round effects, are they now? A; Additional stimulus beyond CSPP and TLTRO2 not necessary as we expect higher inflation. We do not see evid...

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FX Weekly Preview

2016-05-29

by Marc Chandler

2016-05-29

The US dollar bottomed against nearly all the major currencies on May 3. The hawkish April FOMC minutes that began swaying opinion about the prospects for a summer rate hike were not published until two weeks later, and the confirmation by NY Fed President Dudley was not until May 19. Nevertheless, the shift in expectations for …

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Two Decisions from Europe

2016-05-03

by Marc Chandler

2016-05-03

It might not be on investors' calendars, but European officials will take steps toward addressing two issues tomorrow. First, the EC will make a preliminary recommendation of visa-free travel in the Schengen area for Turkish passport holders. S...

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FX Daily, April 21: ECB Takes Center Stage

2016-04-21

by Marc Chandler

2016-04-21

The ECB meeting is the session's highlight. In recognition of the risk that ECB President Draghi expresses displeasure with the premature tightening of financial conditions through the exchange rate channel is encouraged a modest bout of euro s...

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Four Keys to The Week Ahead

2016-03-27

by Marc Chandler

2016-03-27

There are four events that will shape market psychology in the week ahead. They are Yellen's speech to the NY Economic Club, US jobs data, eurozone March CPI and PMI, and Japan's Tankan Survey. The broad backdrop is characterized by the rebuilding of risk appetites since the middle of February, though the MSCI emerging market … Continue reading...

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ECB, Corporate Bonds, and Credibility

2016-03-23

by Marc Chandler

2016-03-23

The euro's rallied shortly after the ECB announced numerous monetary measures that in their totality were more than expected. Many saw this as proof that monetary policy had lost its effectiveness, and central banks have lost credibility. R...

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Rising Sight Deposits at SNB Means Rising SNB Debt

Money creation and sight deposits may have two points of view: 1. The central bank creates money - i.e. the SNB decides to increase sight deposits when it does currency interventions 2. Commercial banks create money - inflows in CHF on Swiss bank accounts make those banks increase their "sight deposits at the SNB. If inflows in CHF are higher than outflows then CHF must rise, unless the central bank does currency interventions. We will present...

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What Drives the Economy: Consumer Spending or Saving/Investment?

The concerted actions in September 2012 between the two big central banks reflected two fundamental economic principles: The Fed opted for Keynes' law, the ECB for Say's Law with conditionality. And apparently the ECB was successful.

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When FX wars become negative interest wars

2014-08-27

by Izabella Kaminska

2014-08-27

Beat Siegenthaler, FX strategist at UBS, has been wondering about what the Swiss National Bank may do if the ECB’s measures to weaken the euro begin to test its 1.20 EURCHF floor. He notes, for example, that there has already been a marked divergence...

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The Swiss Franc, Pseudo-Mathematics and Financial Charlatanism

ECB Measures Background: How to Reduce German Competitiveness and Talk down the Euro

2014-06-06

by George Dorgan

2014-06-06

In our view, the ECB measures of June 2014 want to increase German lending, spending, salaries and inflation. Finally they target a reduction of German competitiveness. The ECB wanted to talk down the euro but will not succeed. We explain why the measure are bullish for the euro. We expect EUR/USD of 1.40 in the … Continue...

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The ECB interventions in the year 2000

euro trade-weighted index vs ecb verbal and actual intervention

Fundamentals,FX,Gold and CHF:Week November 18 to November 22

2013-11-23

by George Dorgan

2013-11-23

FX Price Movements November 11 to November 15 2013

Fundamentals with highest importance: The HSBC Flash Purchasing Manager Index (PMI) for China weakened from 50.8 to 50.4. In particular, new export orders, output prices and employment started to decrease again, while output increased. The preliminary Markit manufacturing PMI for the United States edged up to 54.3 (vs. 52.3 expected), a 9-month high after the …

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Fundamentals,FX,Gold and CHF:Week November 11 to November 15

2013-11-16

by George Dorgan

2013-11-16

Fundamentals with highest importance: In Janet Yellen’s hearing at the Senate Banking Commission, the future Fed chair emphasized the need to provide support to the economic recovery and to overcome low inflation. Her speech supported equities, gold and US Treasuries. GDP in the Euro zone rose by 0.1% QoQ in line with expectations, but less …

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Fundamentals,FX,Gold and CHF: Week November 4 to November 8

2013-11-09

by George Dorgan

2013-11-09

November 4 to November 8 Weekly FX Rates

Fundamentals with highest importance: The U.S. GDP release for Q3, showed that despite the recent U.S. critique with Germany, the Americans are trying to follow the successful Germans: for the first time since Q1/2012 and Q2/2011 exports rose more than imports. GDP was up 2.8%, but not driven by consumption, it was mostly helped by …

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Fundamentals,FX,Gold and CHF: Week October 28 to November 3

2013-11-02

by George Dorgan

2013-11-02

This week had a focus on – due to the government shut-down – the long awaited U.S. data: Highest importance: The ISM Manufacturing Purchasing Manager Index (PMI) for October came in at 56.4, higher than the 55 expected. The value for new orders and for production remained above 60 despite the government shutdown. The value …

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The European Transfer Union From North To South and from Poor to Rich between 1999 and 2007

cyprus, spain, italy, france, austria, portugal, germany, wealth europe in comparison

Cheap ECB rates and rising home prices helped to enrich Southern Europeans between 1999 and 2007. Germany's middle-class and poor, most of them not owning a home, were the ones that financed it.

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European Wealth Reports: Why “Median” Italians are Far Richer than Germans

Italy home sales business loans 2000-2012

We explain why according to the European wealth reports "median" Italians are more wealthy than Germans. The main reasons are high savings and accumulation of wealth for the average family until the 1990s, often invested in homes and real estate. Low ECB interest rates finally let the value of the home rise strongly.

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