Ecb Financing Governments

Highlights - An acceleration in deposit withdrawals, combined with the prospect of an anti-austerity party winning the next election, has brought to the fore concerns about a potential Greek exit from the euro zone. - Our base case assumption is that under the most likely scenario, the Greek election will lead to a government that sticks to an EU/IMF program, even if the terms are renegotiated. - However, we do believe that Greece needs a further restructuring of its debt and we do think the country will ultimately exit the euro - we're just not convinced that Europe is ready for this to happen at the moment. - If an accident does occur and Greece does leave the euro in the near term, it would have global financial ramifications that could range from severe to catastrophic. ...

Dukascopy Fundamental Analysis EUR Mario Draghi, the ECB President, insisted on Greece to stay in the Euro bloc during his public speech on Wednesday regarding the possibility of Greece withdrawal from the Eurozone. Nevertheless, according to him, the ECB will stick to its anti-inflation mandate. The ECB President's comments came after Irish and Belgian central banks reported that Greek exit would not be disastrous for the Eurozone. USD Jobless claims in the U.S. didn't live up to the expectations that it will decrease by 5K and remained unchanged, at 370K level, in the week from 6th to 12th of May. Amount of people on rolling unemployment claims increased by around 18K while the number of people on prolonged payments decreased by around 45K. 31 out of 52 states or territory's reported ...

Fundamental News Today’s highlights: · ECB President Draghi Speaks (EUR, 13:30 GMT) · FOMC Member Fisher Speaks (U.S., 16:15 GMT) · Housing Starts (CAD, 13:15 GMT) Consumer borrowing in the U.S. surged in March by the most in more than a decade on growing demand for educational financing and autos. Credit rose by $21.4 billion, the biggest gain since November 2001, to $2.54 trillion, Federal Reserve figures showed today in Washington. The advance was paced by a $16.2 billion jump in non-revolving debt, including student and car loans. Australia’s trade deficit was at A$1.587 billion in March, the Australian Bureau of Statistics said on Tuesday. That missed forecasts for a shortfall of A$1.4 billion after showing a deficit of A$754 million in February. Exports ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Surprisingly-strongUS earnings reports released after the NY close generated an upbeat tone in Asia, allowing the Australian dollar to claw back all losses it has suffered since Tuesday’s soft CPI reading. Asian equities also got a boost, and USDJPY is still looking firm ahead of tonight’s Fed policy announcements. There are three FOMC-related events to watch out for. The policy statement will be published first, but our US economists doubt the Fed will alter its view that economic conditions are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. Ninety minutes later the quarterly forecasts may show some modest upward revisions to inflation and growth projections, and some Fed officials may ...

Despite the efforts done by European officials to ease the debt crisis, worries spread in markets after the rise in Spanish 10-year bond yields to 6 percent, coming close to levels which forced Greece, Portugal and Ireland to ask for international bailouts. On the other hand, Bank of Spain published on its website that Spanish banks' borrowing from the ECB skyrocketed by nearly 50% last month. Domestic banks borrowed 227.6 billion euros in March compared to 152.4 billion euros in February. Spanish banks tapped 29% of the aggregate long-term loans offered to euro-area lenders, including the three-year long-term refinancing operation loans which were launched by the ECB since last year. Also, they borrowed more than 60% of the loans received by other euro-zone banks, according to the ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD Australia chalked up a second consecutive trade deficit in February triggering a 30 pip drop in AUDUSD. Losses could have been greater had a technical support line not made its presence felt. The consensus had been looking for a rebound back into surplus territory, as the effects of the Lunar New Year holiday were expected to have worn off by now. However, iron ore exports only partially recovered from January’s steep drop, and the value of coal exports fell another -16% m/m. Naturally questions are now being asked if this latest data point is yet another symptom of a China slowdown. We reserve judgment for now, and note that inclement weather may have disrupted iron ore shipments in particular. The dollar continued its broad-based ...

With the unusual Wednesday decision, the ECB will bring us forward quickly to a long weekend, and despite the ongoing uncertainty over the outlook, the ECB is still expected to be prudent and hold rates steady. The European Central Bank will announce the rate decision as usual at 11:45 GMT and expected to keep the key lending rate (Main Refinancing Rate) steady at 1.0% alongside the deposit facility and the marginal lending facility at 0.25% and 1.75% respectively. We have surely seen the ECB step up the crisis fighting measures and offered nearly one trillion euro in loans to banks and ballooned its balance sheet to help contain the crisis, but is it enough for now. The actions by the central bank and especially the three-year LTROs has anchored the financial crisis in the banking ...

The main focus this week will be on rate decisions by the two giant European banks, the European Central Bank and the Bank of England, in addition to bond selling by some euro area governments. Starting with the ECB, probably the governing council will leave the rate unchanged at its low level of 1.00% to boost growth amid the undergoing slowdown. In March, the ECB left interest rate unchanged while in February the ECB had allotted 800 European banks with 529.5 billion euros for 1,092 days in a second round of its Long-Term Refinancing Operation (LTRO) compared with 489 billion euros in the first round launched in December, beating forecasts of 470 billion euros. In fact, the bank's liquidity pumping managed to ease tensions in financial markets; however, there are no signs that there ...

Weekly Economic and Financial Commentary U.S. Review Housing Indicators Pulled Back, but Don't Be Alarmed This week, the economic calendar was chock-full of housing market data. While housing indicators painted somewhat of a mixed picture, with nearly all housing market indicators unexpectedly declining on the month, we continue to see real improvement. That said, much of the pullback was due to the mild winter, which likely exacerbated the seasonal adjustment process. Housing starts unexpectedly fell 1.1 percent to a 698,000-unit pace in February. January starts, however, were upwardly revised to a 706,000-unit pace, the highest level since October 2008. Housing Indicators Pulled back, but Don't Be Alarmed This week the economic calendar was chock-full of housing market data. ...