The much anticipated additional measures have been revealed:
- DRAGHI UNVEILS PACKAGE OF TARGETED LTROS, WORK TO PREPARE QE
- DRAGHI SAYS INITIAL SIZE OF TARGETED LTRO PLAN IS 400BLN EUROS
- ECB EXTENDS FIXED RATE FULL ALLOTMENT, SUSPENDS SMP STERILIZING
- DRAGHI SAYS PACKAGE INCLUDES PREPARATIONS FOR ABS PURCHASES
In other words, even more actions along what was expected: keep in mind the last time the ECB did €1 trillion in LTROs it did exactly nothing to boost inflation or the “real economy.” Furthermore, the ABS purchases aren’t activated: just being “prepared.” However, what was not revealed was the biggest wildcard: European QE, which as we said repeatedly, won’t happen until Europe’s deflation is far worse, if ever.
Speaking of growth, we get the usual V-shaped yoyo: cut of 2014, while boosting 2015 and 2016. Guess the ECB does not anticipate snow or Easter next year:
- ECB SEES 2014 GDP GROWTH OF 1% VS. 1.2%
- ECB SEES 2015 GDP GROWTH OF 1.7% VS. 1.5%
- ECB SEES 2016 GDP GROWTH OF 1.8% VS. 1.8%
Curiously this is happening as inflation is revised lower across the board relative to prior forecasts:
- ECB SEES 2014 INFLATION AT 0.7% VS. 1%
- ECB SEES 2015 INFLATION AT 1.1% VS. 1.3%
- ECB SEES 2016 INFLATION AT 1.4% VS. 1.5%
Furthermore:
- DRAGHI: ECB TO EXTEND EXISTING ELIGIBILITY ASSETS AS COLLATERAL
Good news for Europe’s collateral starved economy: Greek oil and feta are still eligible as ECB collateral
More headlines from Bloomberg:
- DRAGHI SAYS ECB INTENSIFYING PREP WORK FOR ABS PURCHASES
- DRAGHI SAYS BANKS ABLE TO BORROW 7% OF TOTAL LOANS TO EURO AREA
- DRAGHI SAYS LOANS TO PUBLIC SECTOR NOT INCLUDED IN CALCULATION
- DRAGHI SAYS INFLATION EXPECTATIONS ARE FIRMLY ANCHORED
- DRAGHI SAYS ECB READY TO ACT SWIFTLY IF NEEDED
- DRAGHI SAYS COUNCIL UNANIMOUS IN COMMITMENT TO ACT
- DRAGHI SAYS ECB CONSIDERING NON-STANDARD TOOLS WITHIN MANDATE
- DRAGHI SAYS SAYS ECB RATES TO REMAIN AT PRESENT LEVELS
- DRAGHI SAYS ECB TO CONDUCT SERIES OF LONG-TERM OPERATIONS
- DRAGHI SAYS ECB OPERATIONS TO MATURE IN SEPTEMBER 2018
- DRAGHI: ECB TO EXTEND EXISTING ELIGIBILITY ASSETS AS COLLATERAL
via Zero Hedge http://ift.tt/1hePLn5 Tyler Durden