Ewald Nowotny, a member of the ECB Governing Council said recently he was comfortable with the possibility of an increase in the deposit rate, from -0.4% to -0.2%, “as a first step” before any change in the official interest rate. At April 6, European banks kept 690, 384 million euros in the ECB. It’s the first time, since interest rates have been at a record low of 0%, that an ECB member has talked so clearly about a rise.
ECB monetary normalisation
Morgan Stanley believes Spain and Italy are going to dominate Net Interest Income growth in 2019. They flag that Unicaja, Bankinter and Caixabank are amongst the banks which improve their ROTE more with every 50 bp rise in the Euribor. Furthermore, they have very efficient cost structures.
It seems obvious that the most sensible thing to do with respect to retirement is to try to save something and invest it well to complement the meager pension which, foreseeably, the State will give us when we retire.
Draghi is nervous because the dollar has begun to fall, messing up his plan to withdraw stimulus from an economy which is increasingly more dynamic.
The IMF has just upped its forecast for global growth by one-tenth of a percentage point to 3.6% and 3.7% respectively for this year and the next. The message from the supranational organisation is relatively positive: over 75% of the world is seeing an acceleration in its rate of growth.
Intermoney | There is little in the way of significant economic data due out in Europe today, so the main focus will be on the minutes of the ECB’s last meeting.
The minutes of the ECB’s July meeting published on Thursday reflected the central bank’s concern about the strength of the euro, but also a degree of caution regarding continued weak inflation data, analysts say.
Kommer van Trigt (Robeco) | The markets are discounting that in the next few months there will be more certainty surrounding the central banks’ normalisation strategy. In its quarterly outlook, Robeco’s Global Fixed Income Macro team says it makes sense for the central banks to begin to normalise their policies.
José Luis M. Campuzano (Spanish Banking Association) | The markets are discounting that in the next few months we will see greater certainty in monetary normalisation strategy. The start of the Fed’s balance sheet adjustment can also provide the rest of the central banks with information on the reversion of quantitative measures.
José Luis M. Campuzano (Spanish Banking Association) | It’s been balance sheet adjustments and the worsening of the deliquency rate which have been mainly responsible for the deterioration in banking margins over the last few years. It’s important for the ECB to establish a clear strategy for monetary normalisation for the future.