European Bank Interest In ECB's Weekly "Monetization" Auction Plunges
As reported yesterday, the ECB today completed a weekly liquidity withdrawing operation consisting of Fixed Term Deposits, to "remove" the excess cash obtained from €51 billion worth of sovereign bond purchases. This was the sixth consecutive such auction, and the sixth consecutive decline in the bid to cover. 67 bidders participated and submitted total bids for €71.559 billion, to take down €51 billion, or a 1.40 Bid To Cover, which was another sequential decline compared to last week's €47 billion in take down after €71.078 in total bids, or 1.50 bid to cover. The weighted average allotment rate was 0.31%, with a maximum rate of 1% and a marginal rate of 0.4%. With another auction next week, and then many more, all dependent on the amount of debt that Spain et al place "successfully", we expect the Bid To Cover to decline consistently, until we hit a 1 BTC and the ECB realizes its monetization program is a failure.
The declining interest in auctions, as seen by the drop in Total Amount Bid and Bid To Cover, and the increasing cumulative total of monetizable amount that must be auctioned off (a scary combination), can be seen below: