Exclusive News

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'

- ECB banking system credit ‘a great deal of money with very, very market-distorting effects’ 
- The pandemic, ‘economically speaking, is over’
- See inflation plateauing rather than coming back down quickly
- Dovish Bundesbank president would be ‘somewhat problematic’

ECB Hawk-Dove Ranking: Wunsch Formally Enters Hawkish Territory

- Wunsch: ‘I’m being perceived as someone who changed camps’

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

- 2023 HICP forecast likely below 2%, but realised outcome could easily be at 2%
- Must be patient, but can’t exclude that inflationary forces are quite strong and at some point require reaction
- Should recognise that our models risk underpredicting inflationary pressures
- ECB faced with ‘now-or-never’ moment; ‘this is a huge opportunity to re-anchor to 2%’

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

- Should Have Been ‘Part of a Large Package’; Doubts Whether PEPP Will Really End in March
- Announcement of PEPP’s End Seen as Undercutting Pushback Against Rate Expectations

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

- Insider: ‘do not see a situation that first we need to stop asset purchases and only later on increase the interest rates’
- Insider: ‘see possibilities of a combined strategy’ where ECB hikes rates but still buys government debt

ECB Insight: Sparse Recent Communication Sets Stage for Mostly Restrained Presser

By David Barwick – FRANKFURT (Econostream) – Rare is the Governing Council meeting of the European Central Bank that is preceded by as thin a trickle of communication from the Executive Board as the gathering this week.

ECB Insight: Villeroy Dons the Mantle of ECB Spokesperson Again

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau, freshly nominated to a second term at the helm of Banque de France, delivered a speech on Tuesday in which he staked out a broad array of bold positions:

TRANSCRIPT: Interview with Belgian Debt Agency’s Maric Post, Director Treasury and Capital Markets, on 06 October 2021

By David Barwick – FRANKFURT (Econostream) – Following is the full transcript of the interview conducted by Econostream on October 6 with Maric Post, Director Treasury and Capital Markets at the Belgian Debt Agency:

EXCLUSIVE: Belgian Debt Head: Expect Funding Plan Magnitude in Coming Years to Be Like 2021

- Belgium ‘not pushing to extend’ average maturity of debt portfolio any further
- Belgian debt head Maric Post: ‘we want to stick to a liquid curve up to 50 years’
- Front-loading Belgian debt issuance in 1H is ‘something that suits us well for now’

ECB Insight: Lane Laying the Groundwork for the ECB to Underdeliver?

By David Barwick – FRANKFURT (Econostream) – European Central Bank Chief Economist Philip Lane’s speech on Monday raises the possibility that the ECB is even less inclined to withdraw support than previously thought.

ECB Insight: On Inflation, Schnabel Has More Questions Than Answers

By David Barwick – FRANKFURT (Econostream) – The European Central Bank remains profoundly unsure about where inflation in the euro area is headed, and while Executive Board member Isabel Schnabel’s speech on Thursday offered an interesting recital of many reasons why, it served to highlight that uncertainty more than to shed any new light.

TRANSCRIPT: Interview with ECB Governing Council member Scicluna on 01 October 2021

Following is the full transcript of the interview conducted by Econostream on October 1 with Edward Scicluna, Governor of the Central Bank of Malta and member of the Governing Council of the European Central Bank:

EXCLUSIVE: ECB Scicluna: Could Be Possible That We Achieve Price Stability by 2025

- Avoided tapering because don’t want to commit yet to end PEPP; ‘we’ll do that in December’
- Would view desire to include Greek debt in APP with sympathy, but must examine implications
- ‘All ears and eyes to see whether economic actors are going to contribute to inflation or not’
- ‘Certain countries would mount legal opposition to a flexible APP’