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ECB Keeps Rates Unchanged
Completely in line with expectations.
From the ECB:
At today’s meeting, which was held in Brussels, the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.25%, 0.75% and 0.00% respectively.
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.
And while there is some hope Draghi can do something besides jawbone, because so far he has shown he is woefully incapable of acting, at the press conference in 45 minutes, for now the EURUSD is rapidly approaching the 1.40 "redline."
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No suicide today....that's good news.
Sounds to me like the market is pissed with no EU QE.... thats too bad for all the institutions buying all that worthless sovereign paper looking to front run the ECB.... #DBisgoingdown
The day is young...
...The reaction was immediate.
<-- he jawboned piigs bonds down to 5%
<-- he stealth qe-ed piigs bonds down to 5%
Tyler, about that redline, would it be smart to short the euro all in at 1.4?
Just your opinion because most likely I'll do that :)
LOL
Be the Muppet.
"...while there is some hope Draghi can do something besides jawbone, because so far he has shown he is woefully incapable of acting..."
nah, incapable is imho the wrong word. the ECB is unwilling to do a QE just to satisfy a few megabanks. even if it would, it's efficacy would be dubious (enough ZH articles on that theme) and it's effect on price inflation - primarily driven by a decrease of energy and food prices - negligible for quite a while
after all, while the FED is "tapering" (meaning printing less, yet still printing) the ECB is busy shrinking it's balance sheet
Ghordius do you believe the Spanish and Italian bonds etc. are plummeting in yield because their countries are doing so well that their bond market reflects their economic strength? That is why Draghi can choose to do nothing right now? Or are yields dropping because people are scrambling for yield anywhere they can because of the complete absence of growth and they believe those bonds are absolutely backed by the ECB should it become necessary?
I may not be able to reply, but I appreciate your input. thanks.
fonz, to be frank what I believe is irrelevant. it's more relevant what markets believe
there are many reasons why the Spanish and Italian bonds are going up. one that has been often missed is repatriation, for example
I don't know if you remember, but I wrote many other reasons, including that in doubt, continental governments are historically known to force their bonds down the throat of the banks they have influence on, yet all your reasons are imho sound, too
imo it's a fact that the ECB does not have to intervene, now. and that it's in a fundamentally different position than the FED, politically and financially
Thanks Ghordius. I give Draghi a ton of credit (no pun intended) for talking his way as far as he has.
;-) so long, fonz. he did, up to now, a good rendition of "Dirty Harry". a "good old" continental nb tradition
Dragi is boxed in! When things get rough across the globe expect eyes return to Europe, where they continue to talk. I have not written much about the Euro-zone economy or banking system as of late because nothing is really happening.
The Euro-zone is engaged in a talkathon, with fear of an immediate collapse off the table the members of the Euro-zone much like their political counterparts in America just talk about solutions without any action. Below is an article updating what is not happening in Europe.
http://brucewilds.blogspot.com/2014/04/euro-zone-update.html
Hollande is going to cry "you murder me and my piddling signs of recovery" and Mutti is going to sing "I'm not scared of Euro going north of 1.40"...
They are going to have a joint meeting somewhere on a BOAT, --(Mutti takes Hollande for a ride, hahaha)-- where Mutti will spell it out in plain Deutsche to Frenchy-frog-legs --(economically speaking)-- who wants ECB to QE like nobody's business to save Club Med; of which France is rapidly becoming new member.
The currency wars like the Ukraine cold war will be driving a wedge between North and South EU in 2014/2015; especially as the coming Euro parliament elections will blow a huge hole into the euro federalist movement.
And, we are still confronted with the "hush hush" US offensive of trans-atlantic US Oligarchy promoted Corporate SPIEL called Tafta, which should put laggard France somewhere between a rock and hard place for Hollande.
No wonder he sends a contingent to Nigeria to be ethical and moral boot-polisher of Pax AMericana, in that oil bamboozling land for the Seven Sisters and their Seven Nigerian dwarfs, who play the game of scamming champions of Africa; all on the gravy-take from Oil big brother; and let Boko Haram do their own Allah O akbar holy, green-fascist scam; a scam which in comparison is tiny-- though inexcusable and rampant copy catting of the bigger one going on--- in rape of nation; but "O my God", HUGE and insufferable scam for the West.
Our Media circus and our political clowns now define their own Richter scale of what constitutes TRUE VERITABLE RAPE of nation and its hi-jacked people; from Somalia to Capetown : If its sells guns n butter to surrogates then its not rape, its defense of FREEDOM ! Like in Libya!
We deserve our leaders in what is still called a "democratic republican" construct.
They needed some news to push through the S&P head and shoulders technicals. I guess their daily buying wasn't enough............
Once again we'll see the stupidity of the single currency. If an country cannot influence the value of its own currency, then how can it have any meaningful economic policy? The EU, and particularly the common currency, is a short sighted idea born of the fear of war and lead by over enthused delusional socialist idiots.
The real problem with the EU is that it has removed even more consent, causing the very friction it seeked to avoid. Short sighted, misinformed, wasteful and hopeless. End this absurd experiment NOW.
The art of distraction. QE is a technical default, but much less destructive than ZIRP or NIRP. The oligarchs are starting to reveal themselves and their true motives. They will destroy any "sovereign" to maintain ownership, this includes the U.S.S.A. and the E.Z. The oligarchs will preserve and use the U.N., N.A.T.O. and the central banking system at all costs to maintain power and control over real resources, including the human kind.