ECB

The key question remains what the banks will do with the newly acquired funds. We suspect that to the extent banks buy sovereign bonds, they will purchase their own sovereign's bonds rather than their neighbor's. More details of the nuances…

I thought I should highlight that Marshall Auerback was on Fox Business yesterday since he writes here occasionally. I wish it were more often! Marshall was on message regarding the euro zone debt crisis. His point: Additional liquidity is…

To it’s credit, the ECB has been pretty good on the liquidity front all along. I’d give it an A grade for liquidity vs the Fed where I’d give a D grade for liquidity. Back in 2008 the ECB was quick to provide unlimited euro liquidity to its…

The euro extended its rally to a six day high, just shy of $1.32 before the results of the ECB's allotment. The results were at the upper end of expectations and the euro was returned to session lows. A classic buy the rumor of a strong…

Following the 1-year repo in June 09, there had been market talk of the money going into the short-term Italian and Spanish bonds. Yet we don't expect as much of new carry trades some officials might wish. The lion's share of the funds LTRO…

The country’s debt dynamics are far from unsustainable at this point, but given the weakening in the country’s export performance and the steady unwinding of the housing boom we can now anticipate I would expect growth to be weaker than…

The ECB is seen to be the key protagonist and the pressure is more acute on it to act. Yet it steadfastly refuses. The other solution that has been advocated is a joint European bond. It is not going to be forthcoming any time soon. Such…

Banks can borrow as much as they want from the central for three years at the refi rate. They are limited only by their desire and collateral. The ECB also liberalized further its definition of acceptable collateral. But expectations of…

Through all of this hand wrangling, the Euro remains fixed at the same value as it started with in January, roughly $1.30. If open interest information from our futures markets are any valid indication, currency speculators, both commercial…

By cutting 50 bp in one swoop, the Norges Bank hopes to get ahead of the curve. This is part insurance against addition headwinds, but also responds to the recent data indicating an economic slowdown.