ECB monetary normalisation

ECB night

The ECB is committed to continue to increase rates significantly

Annalisa Piazza (MFS Investment Management) | The ECB is committed to continue to increase rates significantly, at a steady pace and to keep rates in restrictive territory until the medium inflation target returns to target. The central bank announced that it will start quantitative tightening (QT) related to the APP at the beginning of March 2023, with a “measured and predictable pace”, allowing the Eurosystem balance sheet to decline by…


ECB bonds

ECB: A passive quantitative tightening (without bond sales)?

Germán García Mellado (A&G) | Regarding interest rates, we expect a 50 basis point rise for Thursday’s meeting, placing the deposit facility at 2%. We do not believe that Lagarde will specify the steps to be taken for the first meetings in 2023 or detail the terminal rate of this cycle of rate hikes. She will therefore maintain a stance similar to that shown since the post-summer meetings, in which…


zero rates

Both official and deposit rates are starting to thaw

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.


Caixabank

Spain And Italy Will Dominate Net Interest Income Growth in 2019

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.


guaranteeing Spanish pensions means reforming the system itself

Pensions In Spain: A Bleak Outlook

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.






Central banks and normalisation policy

Could the central banks dampen the financial markets’ enthusiam?

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.