Analysts Respond To ECB's Toned Down Plan: "Priced In" And Details Still Lacking

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.