Den europæiske centralbank lancerede i går et midlertidigt opkøbsprogram for obligationer på 750 milliarder euro. Beslutningen viser, at ECB er i stand til at træffe afgørende beslutninger under Christine Lagarde.
Uddrag fra Nordea:
ECB Watch: Corona QE
The ECB launches a new temporary QE programme to run until the coronavirus crisis is over. The ECB is finally in a crisis mode and ready to take further actions if needed. The way spreads were exploding, new ECB measures were certainly needed.
At an emergency meeting tonight, the ECB launched a new temporary QE programme totalling EUR 750bn. By its actions and strong wordings, the ECB created space for fiscal policy measures (e.g. in Italy) which are key to minimizing the negative impacts of the Corona virus.
Importantly, the ECB showed that it is capable of making decisions under President Lagarde. Markets had largely been disappointed with the actions and communication taken at the ECB meeting last week and especially Italian government bond spreads had widened massively vs Germany. Austrian central bank governor Holzmann prompted a new round of Italian spread widening early Wednesday when he said that monetary policy had reached its limits. The ECB later issued a statement correcting Holzmann.
We believe today’s actions are an important step in order to push the Italian spreads towards more manageable levels. However, more actions are probably needed as the economic crisis seems to be extremely severe and financial markets are in a strong risk off mode. With the new programme in place, it will be easy to increase the amounts further, if necessary, at a later stage. For example, the Bank of Finland Governor Olli Rehn did not rule out purchases of equities in an interview given to the Finnish media prior to the ECB emergency meeting.
Thus, we think that the ECB is finally at a crisis mode and ready to take actions if needed. A rate cut does not appear to be among the preferred options given today’s focus on bond purchases and the fact that the option has now been passed twice. But there are a number of other type of tools the ECB could come up with (see our list here) and it is of course famous for inventing new ones in a case of an emergency.
Actions today:
- A new temporary asset purchase programme of private and public sector securities worth EUR 750bn – the Pandemic Emergency Purchase Programme (PEPP).
- Purchases will be conducted until the coronavirus crisis is over and at least until the end of 2020.
- Purchases will include the same assets as in the APP.
- Purchases of government bonds will follow the capital keys but will be flexible in time.
- Non-financial commercial paper can be bought under the CSPP.
- The Governing Council will do everything necessary within its mandate.
- Issuer limits are not lifted but will be going forward if it becomes necessary.
