Exclusive News

ECB Insight: Policy Sequencing Inversion Not Base Case But Still Not Excluded

By David Barwick – FRANKFURT (Econostream) – Although European Central Bank Executive Board member Isabel Schnabel in a speech earlier this month argued in favour of orthodox monetary policy sequencing as a way of limiting unwanted distributional side effects, Econostream continues to think, based on further conversations with insiders, that policy sequencing inversion is not excluded, depending on how the inflation outlook evolves.

ECB Brief: Weidmann: PEPP Flexibility Should Remain Reserved for Special Situations

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Jens Weidmann on Wednesday spoke out strongly about inflation risks and in support of the timely withdrawal of monetary accommodation.

ECB Insight: From Panetta, Another Impassioned Plea for at Least No Less, Maybe More

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Fabio Panetta’s speech on Wednesday confirmed – not for the first time- that surprisingly little has changed about his fundamental opposition to a withdrawal of ECB policy support.

ECB Insight: Waning Concern at the ECB About Hitting 33% Issuer Limit

By David Barwick – FRANKFURT (Econostream) – European Central Bank insiders are growing less concerned about the possibility of asset purchases running up against the 33% limit on the share of individual countries’ outstanding debt the ECB can possess, based on recent conversations with Econostream.

ECB Insight: Schnabel Hawkish on Growth, Inflation; Sceptical of Asset Buys’ Cost-Benefit Ratio

By David Barwick – FRANKFURT (Econostream) – Today’s interview by the European Central Bank’s Isabel Schnabel offered a broad and insightful view of how the most hawkish member of the Executive Board sees various key aspects of monetary policy just three weeks before one of the most important recent meetings of the Governing Council.

ECB Insight: Post-PEPP APP Purchases of Greece’s Sovereign Debt a Very Open Question

By David Barwick – Frankfurt (Econostream) – Anyone ready to succumb to the impression that post-pandemic inclusion of Greece in the European Central Bank’s asset purchase programme (APP) is a done deal might want to consider that central bankers are as familiar as everyone else with the old dictum not to say anything if one has nothing nice to say.

ECB Insight: Lagarde Speech Strikes New, More Optimistic Inflation Tone

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Friday warned of the negative growth impact from the developments driving high inflation, but the clearly more important takeaway was her new optimism about the possibility of inflation eventually getting to the point where the ECB could start raising interest rates.

EXCLUSIVE: Sweden NDO Head of Funding: Reduced Issuance to Hamper Liquidity

By David Barwick – Frankfurt (Econostream) – The Swedish National Debt Office accepts that with the government expecting a budget surplus in each of the next two years, its reduced debt issuance will contribute to less liquidity, according to Johan Bergström, Head of Funding at the NDO.

ECB Insight: Uncertainty About Inflation Outlook Leaves ECB Insiders Wondering, Too

By David Barwick – FRANKFURT (Econostream) – The crucial element of next month’s monetary policy meeting of the European Central Bank Governing Council is the inflation outlook. As Eurosystem staff gear up to make their best guesstimate amid great uncertainty, various insiders shared with Econostream reasonably similar, though still quite tentative views about medium-term prospects for price pressures in the area.

ECB Hawk-Dove Ranking: Holzmann Joins Weidmann and Knot at Hawkish End of Spectrum

ECB Insight: Holzmann Wages Lonely War on QE, but ECB Bank Credit Also Comes in for Beating

By David Barwick – FRANKFURT (Econostream) – Though there are certainly others on the European Central Bank Governing Council who are sceptical about some of what the ECB is doing, Council member Robert Holzmann seems highly unlikely at this juncture to be joined by anyone in his campaign to put an end to all quantitative easing.

ECB’s Holzmann: 'Long Story Short, This Quantitative Easing Has to Stop'

By David Barwick – FRANKFURT (Econostream) – With inflation likely to stay high and liquidity abundant, quantitative easing has ‘done its duty’ and has to stop, European Central Bank Governing Council member Robert Holzmann said Wednesday.

ECB Hawk-Dove Ranking: Wunsch Formally Enters Hawkish Territory

EXCLUSIVE: ECB’s Wunsch: We Must Recognise That the World Has Changed in the Last Three Months

By David Barwick – BRUSSELS (Econostream) - The global macroeconomic environment has changed greatly just over the past three months, adding to the uncertainty Europe’s monetary policymakers face, and it would require relatively little in terms of exogenous developments for euro area 2023 HICP to wind up at 2%, European Central Bank Governing Council member Pierre Wunsch said Friday.

ECB Insight: de Guindos Suggests Exit from Crisis Slowed by Shortages

By David Barwick – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos on Monday appeared to be claiming that shortages affecting economic activity were in effect hampering the euro area’s exit from the crisis.

ECB Insight: TLTROs More Likely to Be Extended Than Not, ECB Insiders Indicate

By David Barwick – FRANKFURT (Econostream) – A growing market perception that the European Central Bank is likely to continue offering targeted longer-term refinancing operations (TLTROs) on somewhat less advantageous terms in a post-pandemic world stands a decent chance of becoming reality, Econostream believes.

ECB Insight: Lagarde Repeats Rate Hike Unlikely in 2022, Passes When Asked About 2023

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde’s rejection on Monday of the idea that she had not countered market rate expectations with much strength neatly underscored the true motive for what was indeed the weakness of that pushback.

ECB Insight: Lagarde’s Announcement of PEPP’s End a ‘Not Very Timely’ Surprise for Some

By David Barwick – FRANKFURT (Econostream) – For someone normally known as a strong proponent of building consensus, European Central Bank President Christine Lagarde’s announcement last week of the end of the pandemic emergency purchase programme (PEPP) next March has some scratching their heads.

ECB Insight: Lagarde Pivots on PEPP Future From ‘Totally Premature’ to ‘It’s Time’

By David Barwick – FRANKFURT (Econostream) – Time flies at the European Central Bank, where President Christine Lagarde on Thursday unexpectedly deemed it the moment to debate, decide and announce the future of the ECB’s pandemic emergency purchase programme (PEPP).

ECB Insight: ECB May Push Back Against Policy Sequencing Inversion Now, But Ultimately Embrace It

By David Barwick – FRANKFURT (Econostream) – Of increasing interest lately is the possibility that the European Central Bank might ultimately deviate from monetary policy orthodoxy and start the lift-off from its low interest rates before asset purchases have come to a complete halt. An insider Econostream spoke to suggested such a sequencing inversion would ultimately prevail.