The european central Bank, inaugurates today the third phase of the program of purchase of securities, the Qe, with an extension almost certain over the expected date of march 2017. It is not entirely sure, but likely, according to the vast majority of observers of the market, which will continue with the amount of 80 billion euros for six months. Or decide to reduce the amount to 60 billion and to extend the Qe of nine months. And it is likely that tweaks the parameters, which is self-imposed in order to overcome the upcoming shortage of securities to buy, especially German Bund: the council may decide to raise from 33 to 50% the percentage of affordable individual issues, or individual issuers, or to buy securities with a yield be low the interest rate on deposits of -0,40% or at least calculate the yield on an average of the purchases and not on single transaction, or deviate slightly and for a brief period by the "capital key", the distribution of purchases depending on the size of the economies of the Eurozone, on which there is already a certain amount of flexibility at the margins. Or a combination of the three options.
The Ecb is ready to extend Qe
so far nothing that the financial markets broadly, you do not expect. Is on after Qe3, however, that the focus of the greater uncertainty and therefore the possibility of a more severe market turbulence. The Qe can’t continue indefinitely is self-evident and noted by the president himself, Mario Draghi, who also has noticed that would not make sense to a sudden shutdown of the program, which can not be reset from one day to another. In the same alert, the president of the Bundesbank, Jens Weidmann, who also was opposed to the Qe, and even now it probably will vote against an extension. The Ecb will then, at a certain point begin a gradual reduction (the so-called tapering), as did the us Federal Reserve. The reinvestment of securities already purchased and arrived in the deadline and then extend it, too, operations. But when will be the reduction? And how to communicate it? So far Draghi has always insisted that the council “not talked about”, but appears to assu me that it should do so today. Although so far the Ecb has always maintained that the goal of getting closer to the 2% inflation rate (today, the Eurozone to 0.6%) continues to depend on the continuation of the extraordinary degree of monetary stimulus. This dependence on the monetary policy, however, could be reduced in the course of the next year, when inflation will rise, according to the forecasts of the Ecb itself, which will be updated today, the upper 1%, even if only for effect of the statistical effect linked to the performance of the oil, and the recovery may finally drag with itself also the inflation of the base (excluding energy and food), blocked, and 0.8% from the beginning of the year. In the last two weeks inflation expectations in the markets that the Ecb is closely following, moved in the right direction. In addition, the Ecb knows, as he recognized the Dragons last week, that the accommodative monetary policy for a longer period of time is a "breeding ground" for financial instability.
Draghi: inflation on the rise, the banks more strong
on The way out, however, is not easy. The Ecb remember clearly the "taper tantrum", the wave of selling in bond markets caused in 2013 by the then chairman of the Fed, Ben Bernanke, with the first indications to reduce the monetary stimulus. And is fresh the memory of what happened last year, precisely in December, when the council was disappointed the expectations of the markets of immediate measures (the extension of the Qe from 60 to 80 billion euros and corporate bonds came to march 2016), causing a backlash that invalidò part of the action taken until then. As always, then, it’s up to the Dragons to find a difficult balance in communication in the press conference following the council, perhaps indicating explicitly the intention to evaluate the continuation of the programme, as, especially in the second half of next year, depending on the evolution of inflation. But leaving a free hand on when to do it.
© Reproduction reserved
No comments:
Post a Comment