European Central Bank Urges Bank Recapitalizations
July 9, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Axel Merk submits:
European Central Bank (ECB) President Jean-Claude Trichet, in his press conference following the central bank’s monthly meeting, built on the more confident tone set in recent weeks. Mr. Trichet suggested improved market conditions are a reflection of the decisive and constructive actions taken by eurozone governments.
Quizzed on why interbank lending rates have gone up as of recent, Trichet stated the move is a rational market reaction as a total of €244 billion in liquidity has been withdrawn from the markets during ECB refinance operations over the past two weeks. However, the liquidity reduction was bank-induced, as unlimited liquidity was offered by the ECB; as a result, the reduction should not be construed as a signal of tighter monetary policy (the €442 billion 12 month liquidity facility was replaced with a €132 billion 3 month and €111 billion 6 day facility, a €199 billion reduction; the following week, another €45 billion was withdrawn in the rolling of short-term facilities).
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European Central Bank’s Inflexible Flexibility: Turning Point for the Euro?
June 11, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Axel Merk submits:
Following the European Central Bank’s (ECB) press conference following its monthly meeting, President Trichet’s main task was to boost credibility. As Trichet makes abundantly clear, the ECB is "inflexibly attached to price stability." To achieve its goal, however, he could have added the ECB needs to be inflexibly flexible. When quizzed on the ECB bond purchase program, a program that may take the ECB down a slippery road of money printing should it not be properly neutralized, Trichet discussed three elements: the purpose, the design and observation of the program.
- The purpose is to support the markets when the transmission mechanism of monetary policy is not functioning;
- The design is to buy select government bonds while withdrawing liquidity;
- The third phase is to observe the effects on the market.
This sounds simple enough, but raises many questions:
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European Central Bank May Be Experiencing Its Epiphany
May 14, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Erwan Mahe submits:
No, today’s headline does not refer to the Christian festival or to three wise men, but to the quasi-mystical "revelation" as defined by James Joyce. Let us hope that this "revelation" is bringing some real light to the dusty theology of the European Central Bank (ECB). The Epiphany, as defined literally, is often associated with moments of strong emotions, like those provoked by the crisis on the eurozone.
Make no mistake about it. The ECB and EU are in the process of successfully containing an even more serious crisis than that experienced in the United States during the subprime loan/CDO/money market fund upheaval. During this European crisis, the market is brutally questioning the "sovereign" quality of certain eurozone countries’ debt and, by Adverse Feedbackloop effect, the euro and the European Union itself.
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European Central Bank Now Playing a Very Weak Hand
May 13, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Bruce Krasting submits:
I have always watched the Swiss Franc. To me it is the “pure play” measuring system for how the Euro is fairing. The following long and short-term charts (click on each to enlarge) tell the story. We closed at the low yesterday. We’re just a few bips away from a new big figure on Euro/CHF.
The following is a chart (click to enlarge) derived from CIA information on External Debt. These are just the liabilities. There are assets on the other side of this ledger in many cases. I put a check next to the big Euro’s. $16 trillion between France, Germany, Netherlands, Italy and Spain. I exclude Ireland, Belgium and Luxemburg because these liabilities are tied to assets.
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European Central Bank Holds Fire on Fiscal Challenges
May 7, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Econ Grapher submits:
The European Central Bank announced no change to the policy rate (at 1%); and in spite of pressure to do otherwise, also no changes to other monetary policy moves. With the fiscal problems surfacing in the EU (most notably Greece), there had been some expectations that the ECB might e.g. "go nuclear"… implementing extraordinary measures, but for now it seems the ECB doesn’t see this as necessary. Before moving into the economic analysis part it’s worth reviewing what they did say in this respect (given the topical nature of fiscal challenges):
As regards fiscal policies, we call for decisive actions by governments to achieve a lasting and credible consolidation of public finances. The latest information shows that the correction of the large fiscal imbalances will, in general, require a stepping-up of current efforts. Fiscal consolidation will need to exceed substantially the annual structural adjustment of 0.5% of GDP set as a minimum requirement by the Stability and Growth Pact.
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Trading the News: European Central Bank Interest Rate Decision Coming Thursday
May 4, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Michael Young submits:
The European Central Bank is widely expected to hold the benchmark interest rate at 1.00% on Thursday as the Greek debt crisis and subsequent downgrades in Spain and Portugal continues to weigh on the euro, and price action following the rate decision may be minimal as ECB President Trichet expects to see an uneven recovery this year.
Why Is This Event Important:
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Sweden Move Could Signal Increasing Strength for the European Central Bank
February 4, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Marc Chandler submits:
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European Central Bank: No Bailout for Greece
January 6, 2010 by Seeking Alpha
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Original Article from Seeking Alpha Short Ideas
Cliff Wachtel submits:
This is significant news for the Euro and we can expect, under normal circumstances, to see movement in the Euro down. Hence the USD will tend to rise, and therefore we recommend :
- SELL EUR/USD Currency Pairs
- GO LONG USD,
- GO SHORT USD COUNTERPARTS (AUD/USD, NZD/USD, CAD/USD)
- GO SHORT COMMODITIES (Gold, Oil)
2. These recommendations are based on trends and analysis at the time of posting. For more information and charts, please see our analysis here.
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European Central Bank: No Bailout for Greece
January 6, 2010 by Seeking Alpha
Filed under Tips
Original Article from Seeking Alpha Dollar Currencies
Cliff Wachtel submits:
This is significant news for the Euro and we can expect, under normal circumstances, to see movement in the Euro down. Hence the USD will tend to rise, and therefore we recommend :
- SELL EUR/USD Currency Pairs
- GO LONG USD,
- GO SHORT USD COUNTERPARTS (AUD/USD, NZD/USD, CAD/USD)
- GO SHORT COMMODITIES (Gold, Oil)
2. These recommendations are based on trends and analysis at the time of posting. For more information and charts, please see our analysis here.
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European Central Bank: Time to Phase Out Liquidity Programs
November 5, 2009 by Seeking Alpha
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Original Article from Seeking Alpha Dollar Currencies
Market Blog submits:
By David Parkinson
The U.S. Federal Reserve Board is having a bit of trouble finding the exit. Not so the European Union’s central bank.
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