ABN Amro mener, at ECB har signaleret villighed til en rentesænkning – ikke på kort sigt, men på længere sigt, hvis økonomien forværres. Signalet kommer uofficielt via Bloomberg, og desuden tyder et par officielle udtalelser på det. Hensigten kan også være at afværge en styrkelse af euroen over for dollaren. Men ABN Amro mener, at signalgivningen fra ECB kan være risikabel, for hvis ikke ECB “leverer varen”, hvis der skønnes behov for det, vil ECB blive beskyldt for at være som drengen, der råber: ulven kommer.
Uddrag fra ABN Amro:
Bloomberg News has reported that the ECB thinks that markets are underestimating the odds of a deposit rate cut this year (on the basis of briefings from unnamed ECB officials).
This is very interesting in the light of comments from DNB President Klaas Knot (traditionally one of the more hawkish members of the Council), who signalled the possibility of a rate cut to curb euro strength earlier today.
The timing is also noteworthy, coming ahead of an FOMC meeting where the message is likely to be dovish – see our preview here. So in that respect, it may represent pre-emptive action against the possibility of dollar weakness and hence euro strength on the back of the FOMC.
These official comments probably still represent verbal intervention rather than a genuine desire to cut the deposit rate further in the near term. Bloomberg reports that the officials noted that they ‘are not currently considering another cut in borrowing costs in the short term. One of them said investors shouldn’t be ruling out such an action at a time when economic uncertainty remains high and the euro is relatively strong’.
Indeed, the ECB has refrained from cutting the deposit rate during this crisis because of concerns about the impact on the bank transmission channel. Last year, Executive Board member Isabel Schnabel explained the reasoning behind that decision (see here).
She noted that ‘compared to previous crises, the starting point of our discussion was a widely shared sense of the benefits and costs of the various instruments that we had employed in the recent past. For example, a further cut in our main policy rate – the deposit facility rate – would have been unlikely to support sentiment and market functioning at a time when banks’ profitability was already expected to come under additional pressure due to the crisis’.
Although the ECB could cushion the blow of a further deposit rate cut on bank profits by raising the tiering multiplier, this does not deal with all of the fallout, as there is still additional impacts on net interest rate income.
So at this stage, we judge that the ECB wants to keep the door open, and indeed some market pricing of rate cut, as a way to restrain further euro strength going forward. Having said that, the ECB may be playing a dangerous game if it is not serious about delivering. Market participants may figure out – or at least test the proposition – that it is the ‘boy who cried wolf’.