ECB Sovereign Bond Buyback Tally: €47 Billion And Rising

Tyler Durden's picture

The ECB has announced that new bond purchases that settled in the past week amount to €6.5 billion, bringing the total to €47 billion. This amount likely accounts for the various "successful" auctions in Spain, Portugal and Italy. The €6.5 billion is higher than the €5.5 billion in incremental bonds that had settled in the prior week. As a result, the ECB will now conduct another fresh (and "quick") term deposit tender on Tuesday at 9:30 GMT, to drain the incremental liquidity from all the recent bond purchases, thus continuing the path of acute schizophrenia as the bank is worried as being seen too easy in its monetization ways by a hawkish (but increasingly less so) Germany. Lastly, "The ECB intends to carry out another liquidity-absorbing operation next week" - after all there are ongoing sovereign auctions in Europe that have no other bids aside from the ECB.

From the ECB:

As announced by the Governing Council on 10 May 2010, the ECB will
conduct specific operations in order to re-absorb the liquidity
injected through the Securities Markets Programme. In this regard, the ECB will carry out a quick tender on 15 June at
11.30 in order to collect one-week fixed-term deposits with settlement
day on 16 June. A variable rate tender with a maximum bid rate of 1.00%
will be applied and the ECB intends to absorb an amount of EUR 47
The latter corresponds to the size of the Securities Markets
Programme, taking into account transactions with settlement at or
before Friday 11 June. The benchmark allotment amount in MROs takes
into account the liquidity effect of non standard measures, assuming an
unchanged size of the Securities Markets Programme and full
sterilisation of this amount via the above mentioned
liquidity-absorbing operation. Fixed term deposits held with the
Eurosystem are eligible as collateral for the Eurosystem's credit
operations.  The ECB intends to carry out another liquidity-absorbing operation next week.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tense INDIAN's picture

have u guys read this :::::

Satanist Insider: "Keep Your Money Hidden"

Joe Shmoe's picture

Here's the JP Morgan funds cut on what's happening:



• SEC set circuit breakers for S&P500 stocks.

• GM recalled 1.5 million vehicles worldwide.

• Hungarian leaders downplayed default comments.


Economic News

• Modest signs of improvement in Beige Book.

• Weak export growth widened the deficit.

• Retail sales contracted 1.2% in May.

• The inventory rebuild continued in April.

• Next week consumer and producer prices released.

• 6/17: LEI, Philly Fed survey, current account.


Thought of the Week

A popular sentiment among the "double-dip" camp has

been that consumer deleveraging will restrict the ability

of consumption to drive economic growth. While it's still

early in the recovery, this week's chart looks at the

interesting dynamic between consumption growth and

consumer credit; despite a negative retail sales report

last Friday, consumer spending remains on track to

grow at a rate of about 3% in 2Q. However, this has

happened in the face of the most significant contraction

in consumer credit since the 1930's, as credit has

contracted some $143 billion since July 2008. Job

growth will play an important role going forward, and

we'll be watching to see if the American consumer can

continue to spend despite credit conditions.