The first responses by the Wall Street sellside brigade to the ECB's "unlimited" yet somehow "sterilized", no longer rate capping thus unsterilized plan emerge and they are, in a word and as expected, unimpressed. Via Bloomberg:
- “Already priced in the short end of Italy and Spain,” says rates strategist Alessandro Giansanti in an interview.
- Says mkt is waiting for further details regarding:
- Explicit maturities of purchases
- When the bond purchase program will begin
- Which country will ask for support
- How the EFSF/ESM will be financed
- The absence of key details “will likely limit the mkt response,” writes rates strategist Richard McGuire in a client note
- Says key details regarding conditionality are missing; these will determine whether Spain requests an aid program or is forced into one by the markets
- This is broadly what markets were expecting, even if some in equity markets were hoping for unsterilized, Marc Ostwald says in email.
- Unsterilized buying not an option given would be outright financing of state debt
- Also some caution as story gives the outline of Draghi’s plan, doesn’t tell us what the various ECB committees have advised and how the rest of the council will react
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Naturally, the only thing that matters, which is whether the ECB's actions will do anything to restore Spanish depositors confidence and halt the insiduous and accelerating Spanish bank run, is untouched - if the Spanish bank outflows persist, all of the above will be for naught.