Following a triple-dip recession and a pandemic, Italian GDP is down 21% from its 2008 peak, back to levels not seen since... 1993.
This has to be the most depressing chart I have ever posted on Twitter. https://t.co/4Eh78YG8Qh
What the ECB could do:
1. Cut rates
2. Do a special SME LTRO
3. Cut the TLTRO rate
4. Increase the tiering multiplier
5. Increase CSPP
6. Increase QE
7. Increase issuer limits
8. Buy senior bank debt
9. Buy ETFs
10. If everything else fails, call Mario back from retirement
The UK just sold bonds at negative yield for the first time ever (July 2023 at -0.003%).
The ECB legal decision on the PEPP is a bombshell.
The 33% issuer limit will NOT apply to emergency asset purchases.
The ECB will target shorter maturities (minimum 70 days!) in the hope that PEPP remains temporary.
No more limits to ECB QE!
THEY DID IT!! twitter.com/GrundSebastian…..
BREAKING: Mario Draghi becomes the first president to leave the ECB without ever having raised interest rates.
Spanish GDP: -18.5% QoQ in Q2 or -55% annualised.
Down to 2002 levels. https://t.co/Dh1J1tSHQh
Von der Lying
ECB (2012): whatever it takes
ECB (2020): for as long as it takes
I'm speechless. The ECB did it. No limits to (PEPP) purchases. Maximum flexibility. The PEPP has morphed into a real bee the day Mario Draghi strikes a comeback. Incredible.
ECB: how to spend it.
A (long) thread on the implementation of ECB's asset purchases in 2020. Spoiler: maximum flexibility, virtually no limits. (1/n) https://t.co/DEUnSX37ch
*ECB ANNOUNCES EU750B PANDEMIC PURCHASE PROGRAM
No words for that. https://t.co/gjOL4ejZHi
History of Fed inter-meeting rate cuts as per @business:
Oct. 1998 (25bp)
Jan. 2001 (50bp)
Apr. 2001 (50bp)
Sep. 2001 (50bp)
Aug. 2007 (50bp discount rate cut)
Jan. 2008 (75bp)
Oct. 2008 (50bp coordinated cut)
Mar. 2020 (50bp)
French PMI: there's no word for that. 😱 https://t.co/5x6wSFo3zG
It was worth the waiting. Historic ECB decision. No limits within the mandate. No constraints on fiscal crisis measures. And believe me, it may be enough!
Lagarde's speech vs Lane's FT interview:
Number of mentions of "inflation":
Number of mentions of "climate" or "green":
Good thing the Fed's balance sheet resumed its expansion last week, otherwise I wouldn't know how to explain that markets are up again. https://t.co/lqGax9r14S
The ECB "takes note" of the BVerfG ruling and "remains fully committed to its mandate".
The ECB notes that the ECJ ruled in December 2018 that it is acting within its mandate.
The ECB is *not* responding to the BVerfG's "ultimatum".
Perfect answer indeed. twitter.com/michaelsteen/s…..
Make no mistake, central bank watchers aren't overplaying this. The latest decisions by the Fed and the ECB are absolutely massive and will change the macro-financial landscape for ever. #InfinityAndBeyond
.@Lagarde off to a strong start in gloves-off mode: "Countries with chronic budget surpluses like the Netherlands and Germany have to invest more to support growth. They haven't really made the necessary efforts". 🍿🍿🍿 twitter.com/BFMTV/status/1…..
Why the German fiscal plan changes *everything* for the ECB: assuming €356bn in new borrowing, the ECB QE 33% issuer limit may not be hit until 2023 (!), versus Q3 2020 under the status quo (a few months left).
[caveat: tons of assumptions including deviations] https://t.co/YwMzU1NEfq
10-year Italian BTP yield drops to 1% for the first time since the lockdown.
Europe is here to close the spread. https://t.co/vwprT16ssM
Always put things into perspective. Well. https://t.co/KjSYNICJlk
Mario Draghi weighs in!! giftarticle.ft.com/giftarticle/ac….. via @FT
The ECB deviated massively from its capital keys once again in April, under its PSPP programme, buying €11bn of Italy bonds (€6.4bn above capital keys) and €0.6bn (!) of German bonds (€6.4bn below capital keys).
Is PSPP the new PEPP? https://t.co/5NiVUg1JNy