Meanwhile ECB Monetization Continues: €51 Billion In Sovereign Bonds Purchased To Date, €4 Billion In Past Week
The ECB has announced its weekly Term Deposit Auction to be held tomorrow will be for an incremental €4 billion, bringing the total variable tender to €51 billion, compared to last week's €47 billion. This simply means that as of Monday, €51 billion in sovereign debt has been monetized by the central bank. As always, this is a liquidity circle jerk, in which the auctioned deposits are eligible collateral for any other ECB credit operations, thereby not having any liquidity-reducing impact whatsoever, even as more Spanish, Portuguese and Greek bonds are purchased by JCT.
From the ECB:
[T]he ECB will carry out a quick tender on 22 June at 11.30 in order to collect one-week fixed-term deposits with settlement day on 23 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 51 billion. The latter corresponds to the size of the Securities Markets Programme, taking into account transactions with settlement at or before Friday 18 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.