The European Central Bank listings | MACROFINANCE
Finally, the European Central Bank extended the program skandiabanken to purchase financial assets include purchase of sovereign debt in the secondary markets, in addition to the purchase of asset-backed securities and covered bonds, in order to minimize the risk of a scenario price deflation prolonged in time. On the other hand, the European Central Bank improved the conditions of the lines of long-term liquidity to banks (TLTRO), applying the reference interest rate (currently 0.05%) in force at the time of implementation of credit, and thus removing the spread of 10 basis points was between the initial cost of liquidity facilities and long-term benchmark rate spread that would have discouraged the demand of banks for the first two rounds of monetary injection.
In principle, the extended financial asset purchase skandiabanken program would be in line with liquidity of 60,000 million skandiabanken Euros per month (flow) starting in March this year to September 2016, resulting in a total expansion of the road Central Bank balance around 1.1 billion Euros (50% of total assets of the monetary authority) to a level of around 3 billion Euros (stock). At the same time, the statement of the European Central Bank made it clear that the program skandiabanken could be extended until inflation (now -0.2% yoy) converges in a sustained manner to levels consistent with the goal of monetary authority (slightly below 2% annually).
With respect to the credit quality of sovereign skandiabanken bonds subject skandiabanken to the asset purchase program, the statement said the European Central Bank made it clear that, in principle, those bonds not meeting the minimum credit rating skandiabanken could be acquired, while the monetary authority instrument a minimum credit quality to protect the collateral for the bond portfolio.
While the market had already risen to the expectations of monetary intervention consistent with the devaluation of the Euro and falling interest rates of long-term government bonds from Germany (0.4%), Spain (1.4 %), Ireland (1.21%) and Italy (1.6%), the actual announcement of the European Central Bank and the significant level of debt purchase skandiabanken program could reinforce this scenario weakening Euro and falling rates long-term interest, with an upside potential in the stock prices. Especially in the context of monetary cycle divergence with the US, where establishedpublic Fed left last October skandiabanken the bond purchase program and where everything seems to indicate that it could start a very gradual rate hike cycle sometime in the second half the year compared to the stage of convergence towards full employment equilibrium. skandiabanken Rate hike cycle in the US which in any case could be delayed in time compared to the decline in inflation expectations triggered by the correction in oil prices and factors hysteresis market associated with the fall in the rate of participation skandiabanken of labor supply work. In the US, the unemployment rate corrected by the "discouraged unemployed" would increase from 5.6% to 6.9%.
In line with this scenario, a consistent skandiabanken financial strategy could include buying ETFs that replicate index of top European shares (HEWG for the actions of Germany and the EWP for the actions of Spain) to hedge currency to avoid the impact of the devaluation skandiabanken of the Euro in line with a long duration position in sovereign bonds in Europe (Spain, Portugal, Italy, Ireland) to maximize capital gain generated by lower interest rates in return for monetary assistance from the European Central Bank.
The main objective of the monetary authority skandiabanken is to inject liquidity into the markets towards minimizing the risk of price deflation scenario (-0.2% yoy variation of the consumer price index inthe December zonaeuro) with economic stagnation extended in time, to increase skandiabanken the real burden of debt and depressed levels of consumption and investment.
The transmission mechanism of debt purchase program is beginning to inject liquidity into banks to reduce funding costs of consumption and investment, promote aggregate demand and thus accelerate the convergence from below toward the goal of inflation.
From the side of the creditworthiness of the agents in the economy, declining interest rates helps stabilize ratios of public and private debt to nominal GDP (inflation and growth), "muffling" the contractionary effect associated with low economic growth and price deflation in a context of high levels of debt. Also, the decline skandiabanken in interest rates
Finally, the European Central Bank extended the program skandiabanken to purchase financial assets include purchase of sovereign debt in the secondary markets, in addition to the purchase of asset-backed securities and covered bonds, in order to minimize the risk of a scenario price deflation prolonged in time. On the other hand, the European Central Bank improved the conditions of the lines of long-term liquidity to banks (TLTRO), applying the reference interest rate (currently 0.05%) in force at the time of implementation of credit, and thus removing the spread of 10 basis points was between the initial cost of liquidity facilities and long-term benchmark rate spread that would have discouraged the demand of banks for the first two rounds of monetary injection.
In principle, the extended financial asset purchase skandiabanken program would be in line with liquidity of 60,000 million skandiabanken Euros per month (flow) starting in March this year to September 2016, resulting in a total expansion of the road Central Bank balance around 1.1 billion Euros (50% of total assets of the monetary authority) to a level of around 3 billion Euros (stock). At the same time, the statement of the European Central Bank made it clear that the program skandiabanken could be extended until inflation (now -0.2% yoy) converges in a sustained manner to levels consistent with the goal of monetary authority (slightly below 2% annually).
With respect to the credit quality of sovereign skandiabanken bonds subject skandiabanken to the asset purchase program, the statement said the European Central Bank made it clear that, in principle, those bonds not meeting the minimum credit rating skandiabanken could be acquired, while the monetary authority instrument a minimum credit quality to protect the collateral for the bond portfolio.
While the market had already risen to the expectations of monetary intervention consistent with the devaluation of the Euro and falling interest rates of long-term government bonds from Germany (0.4%), Spain (1.4 %), Ireland (1.21%) and Italy (1.6%), the actual announcement of the European Central Bank and the significant level of debt purchase skandiabanken program could reinforce this scenario weakening Euro and falling rates long-term interest, with an upside potential in the stock prices. Especially in the context of monetary cycle divergence with the US, where establishedpublic Fed left last October skandiabanken the bond purchase program and where everything seems to indicate that it could start a very gradual rate hike cycle sometime in the second half the year compared to the stage of convergence towards full employment equilibrium. skandiabanken Rate hike cycle in the US which in any case could be delayed in time compared to the decline in inflation expectations triggered by the correction in oil prices and factors hysteresis market associated with the fall in the rate of participation skandiabanken of labor supply work. In the US, the unemployment rate corrected by the "discouraged unemployed" would increase from 5.6% to 6.9%.
In line with this scenario, a consistent skandiabanken financial strategy could include buying ETFs that replicate index of top European shares (HEWG for the actions of Germany and the EWP for the actions of Spain) to hedge currency to avoid the impact of the devaluation skandiabanken of the Euro in line with a long duration position in sovereign bonds in Europe (Spain, Portugal, Italy, Ireland) to maximize capital gain generated by lower interest rates in return for monetary assistance from the European Central Bank.
The main objective of the monetary authority skandiabanken is to inject liquidity into the markets towards minimizing the risk of price deflation scenario (-0.2% yoy variation of the consumer price index inthe December zonaeuro) with economic stagnation extended in time, to increase skandiabanken the real burden of debt and depressed levels of consumption and investment.
The transmission mechanism of debt purchase program is beginning to inject liquidity into banks to reduce funding costs of consumption and investment, promote aggregate demand and thus accelerate the convergence from below toward the goal of inflation.
From the side of the creditworthiness of the agents in the economy, declining interest rates helps stabilize ratios of public and private debt to nominal GDP (inflation and growth), "muffling" the contractionary effect associated with low economic growth and price deflation in a context of high levels of debt. Also, the decline skandiabanken in interest rates
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