Central Bank Exclusives

Exclusive: ECB Should Not Pre-Commit to July Hike, Centeno Says

- Centeno: ‘We better be careful about producing substantial statements about the future’
- Centeno: Announcing decisions ahead of time ‘goes against the strategy’
- Centeno: Governing Council ‘will speak in July’ about what to do
- Centeno: 2024 rate cut ‘compatible with a reduction of inflation to 2% in the medium term’
- Centeno: ECB staff projections ‘may be optimistic in terms of GDP’ and ‘pessimistic on inflation’
- Centeno: ‘How can I be stressed about a projection that says that in 2025 […] inflation is 2.2%?’
- Centeno: Baseline ECB scenario is ‘end to the inflationary process without […] major disruptions’
- Centeno: Pass-through from rate hikes ‘may come abruptly’
- Centeno: Eurozone labour market ‘much more fluid’

28 June 2023

TRANSCRIPT: Interview with ECB Governing Council member Kazāks on 26 June 2023

By David Barwick – FRANKFURT (Econostream) – Following is the full transcript of the interview conducted by Econostream on 26 June with Mārtiņš Kazāks, Governor of Latvijas Banka and member of the Governing Council of the European Central Bank:

28 June 2023

Exclusive: ECB’s Kazāks: In No Hurry to Start Active Sales of Balance Sheet Assets

- Kazāks: PEPP reinvestment important for flexibility reasons
- Kazāks: No need for any changes to the PEPP reinvestment at the moment
- Kazāks: Balance sheet adjustment ‘very much driven by the TLTROs’
- Kazāks: Fiscal policy must become less expansionary, or rates will have to go up even more
- Kazāks: Rates should stay high ‘as long as inflation is not significantly undershooting the target’
- Kazāks: Expectation of rate cut in 1H 2024 ‘inconsistent with the baseline macro scenario’
- Kazāks: ‘We will not be done, in my view, in July, and there will be more rate hikes necessary’
- Kazāks: ‘If necessary, we can take a pause and then return to rate hikes’
- Kazāks: ‘The risks of doing too little are higher than the risks of doing too much’
- Kazāks: Lagarde ‘very skilful in getting almost all of us behind every one of our decisions’

28 June 2023

Exclusive: ECB Insiders: July Rate Hike Increasingly Seen as Not Enough

- ECB Insiders: Two of Three Surveyed Inclined to Hike Anew in September
- ECB Insiders Reject Market Expectations of Initial Easing Move in 1H 2024
- ECB Insiders Want to Leave Interest Rates at Terminal Level for Some Time
- ECB Insiders: July Rate Hike More or Less a Given

26 June 2023

Transcript of Interview with AFT’s Cyril Rousseau on 03 May 2023

By Xavier D’Arcy – PARIS (Econostream) – Following is the full transcript of the interview conducted by Econostream on 03 May with Agence France Trésor Chief Executive Cyril Rousseau:

17 May 2023

Exclusive: Agence France Trésor Head: ‘Do Not Expect Any Changes’ to 2023 Funding Target

- AFT's Rousseau sees ‘slightly higher demand’ for domestic inflation-linked products
- AFT's Rousseau: 10% inflation-linked target ‘not a fixed target but rather a soft one’
- AFT's Rousseau: ‘Don’t think de-anchoring is the main explanation’ for inflation swaps trading high
- AFT's Rousseau: Looks like resumption of money market activities by sovereigns ‘have not destabilised the market’

17 May 2023

Transcript of Interview With ECB Governing Council Member Holzmann on 15 May 2023

By David Barwick – VIENNA (Econostream) – Following is the full transcript of the interview conducted by Econostream on 15 May 2023 with Robert Holzmann, Governor of the Austrian National Bank and member of the Governing Council of the European Central Bank:

16 May 2023

Exclusive: ECB’s Holzmann: ECB Hopefully ‘Moving Towards a Terminal Rate Somewhere Above 4%’

By David Barwick – VIENNA (Econostream) – The European Central Bank is hopefully heading for a terminal rate of somewhat above 4%, even if the smaller moves that are now likelier to characterise monetary tightening could imply hiking interest rates beyond the summer, according to ECB Governing Council member Robert Holzmann.

16 May 2023

Exclusive: Transcript of Interview With Austrian Treasury Managing Director Markus Stix on 3 May 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – Following is the full transcript of the interview conducted by Econostream on 3 May with Markus Stix, Managing Director in charge of markets at the Austrian Treasury:

11 May 2023

Exclusive: Austria Debt Head: Too Early To Call Number of 2023 Syndications, Decision Hinges on Deficit

- Austria plans ‘to tap 2049 green bond by €1bn via auction or syndication’
- Austria ‘will continue decreasing the maturity of our new issuance’
- Green CP programme demand split 50/50 USD and euro, 1m to 3m maturity
- Reintroduction of ECB ceiling has ‘no significant implications’ for Austria’
- April syndication order book saw lot of real money investors, fewer fast money accounts

11 May 2023

Exclusive: ECB Insiders Seen Generally Tilting Towards 25BP, but Very Willing to Discuss 50BP

- ECB insider: Won’t be surprised if we hike by 25bp, but wouldn’t exclude another outcome
- ECB insider: Risk of doing too little currently still greater than the risk of doing too much
- ECB insider: Would require a ‘quite negative’ April inflation surprise for me to support 50bp

25 April 2023

Exclusive: Transcript of Interview with ECB Governing Council member Wunsch on 15 April 2023

By David Barwick – WASHINGTON (Econostream) – Following is the full transcript of the interview conducted by Econostream on 15 April 2023 with Pierre Wunsch, Governor of the National Bank of Belgium and member of the Governing Council of the European Central Bank.

19 April 2023

Exclusive: ECB’s Wunsch: March's Banking Sector Turmoil Could Have Limited or No Monetary Policy Impact

By David Barwick – WASHINGTON (Econostream) – The turmoil that hit banking sectors in various global jurisdictions last month will not necessarily have any significant bearing on the monetary policy decision to be made by the European Central Bank in two weeks, according to ECB Governing Council member Pierre Wunsch.

19 April 2023

Exclusive: Transcript of Interview with ECB Governing Council member Šimkus on 05 April 2023

By David Barwick – VILNIUS (Econostream) – Following is the full transcript of the interview conducted by Econostream on 05 April 2023 with Gediminas Šimkus, Governor of the Bank of Lithuania and member of the Governing Council of the European Central Bank.

6 April 2023

Exclusive: ECB’s Šimkus: Ending APP Reinvestments from July ‘One of the Options’

- Šimkus: Active asset sales ‘could be an option some day in the future’, but not for July
- Šimkus: ‘Let’s deal with the APP and then come back to the PEPP’
- Šimkus: ‘I don’t see a pause in hiking rates in May as a likely scenario’
- Šimkus: Size of rate moves ‘will depend on the data, but we still have some way to go’
- Šimkus: ‘We still need to let the impact of past policy moves kick in’
- Šimkus: ‘Need to maintain the restrictive stance for quite some time’
- Šimkus: ‘Very unlikely that we will see any decrease in interest rates this year’
- Šimkus: OPEC oil production cut a ‘one-off factor’; no need to ‘overreact or exaggerate’
- Šimkus: Core inflation to ‘remain pretty high’ throughout 2023
- Šimkus: Core inflation ‘stickier than many people think’

6 April 2023

Exclusive: Transcript of Econostream’s Interview with German Finance Agency’s Tammo Diemer

- Diemer: Don't have to make changes to auction calendar just because energy prices lower
- Diemer: Inversion of German yield curve has no impact on our issuance activities
- Diemer: Want to be a predictable issuer and want to be an issuer that focuses on auctions
- Diemer: Will do whatever is needed and in our hands to support functioning of Bund market
- Diemer: Need to create additional incentives to attract new investors to green segment

3 April 2023

Exclusive: Transcript of Interview with ECB Governing Council member Scicluna on 21 March 2023

- Scicluna: Ramifications of bank turmoil to be felt for some time, also in Europe
- Scicluna: ‘We strongly believe in the robustness and resilience of our system’
- Scicluna: If we don’t see core inflation peaking, then our job is to continue attacking inflation
- Scicluna: Would be presumptuous for me to say now that I’ll want 50bp in May; must see data
- Scicluna: ‘Nowhere near’ the wage-price spiral we’ve had in the past
- Scicluna: Updated forecasts appeared to us to be out of date the same day
- Scicluna: If core inflation rises, then those who are for tightening will get the upper hand
- Scicluna: ‘Wouldn’t be highly concerned with the results we’re getting from wage settlements so far’
- Scicluna: ‘No indications that we’re seeing’ the light at the end of the inflation tunnel
- Scicluna: Mopping up liquidity is another way to subdue inflation
- Scicluna: Last week’s decision gives sense of stability; you don’t create more stability by hesitating

22 March 2023

Exclusive: ECB Insider: I’d Support Another 50BP Hike in May, Unless Economy or Core HICP Soften

- ECB insider: ‘No doubt that we are still in a tightening mode’
- ECB insider: No hurry to decide on next move, can wait until the time comes
- ECB insider: 50bp hike not much when real interest rates clearly negative
- ECB insider: 4.5% terminal rate only if inflation turns out unexpectedly persistent

17 March 2023

Exclusive: ECB Insider: Slowing to 25BP But Hiking for Longer Could Be a Compromise

- ECB insider: Reducing pace of hiking post-March to 25bp the correct strategy
- ECB insider: Others will oppose post-March slowdown of tightening pace
- ECB insider: ‘Very little discussion that we are now in restrictive territory’
- ECB insider: Some Council members will see the ECB as no longer very far from the terminal rate

8 March 2023

Exclusive: ECB Insider: Some Indicators Suggest Core Inflation Momentum Not Weakening

- ECB insider: Core inflation to remain relatively high and away from our target this year
- ECB insider: Some concerns that wage demands could pick up quickly in 1H
- ECB insider: Increasing trend of firms protecting their margins contributing to price pressures
- ECB insider: Hawks ‘not very comforted’ by assurances of lower medium-term price pressures
- ECB insider: Some hawks question medium-term inflation outlook due to 2d-rd effects, energy prices

1 March 2023