Back
3 Dec 2014
ECB balancesheet target of EUR 3tr is soft – Danske
FXStreet (Barcelona) - The Danske Bank Research Team believes that ECB will realise that more is needed to reach the EUR3tr soft balancesheet target, but in mid-December.
Key Quotes
“The ECB has eased twice in 2014, but liquidity conditions in the Euro system will still be balancing around critical levels in Q1 next year. This follows as the TLTRO operations do not have the size or timing to match the reduction in excess liquidity due to the repayments of the two 3Y LTROs.”
“The ECB is still expecting the current measures to be sufficient in boosting the balance sheet to 2012 Q1 levels, but in mid-December, we expect the ECB will start to realise more is needed to reach the EUR3tr soft target, as the TLTRO allotment in December should be a disappointment.”
“We expect the balance sheet will remain far from the soft target of EUR3tr and without a broadening of the ECB purchases the balance sheet is expected to be broadly at the same level in mid-March 15 as it was in September 14, when Mario Draghi first introduced the soft balance sheet target.”
“We expect the ECB to expand its purchases to corporate bonds in January followed by sovereign bonds in Q2.”
Key Quotes
“The ECB has eased twice in 2014, but liquidity conditions in the Euro system will still be balancing around critical levels in Q1 next year. This follows as the TLTRO operations do not have the size or timing to match the reduction in excess liquidity due to the repayments of the two 3Y LTROs.”
“The ECB is still expecting the current measures to be sufficient in boosting the balance sheet to 2012 Q1 levels, but in mid-December, we expect the ECB will start to realise more is needed to reach the EUR3tr soft target, as the TLTRO allotment in December should be a disappointment.”
“We expect the balance sheet will remain far from the soft target of EUR3tr and without a broadening of the ECB purchases the balance sheet is expected to be broadly at the same level in mid-March 15 as it was in September 14, when Mario Draghi first introduced the soft balance sheet target.”
“We expect the ECB to expand its purchases to corporate bonds in January followed by sovereign bonds in Q2.”