Mens de europæiske regeringschefer har svært ved at træffe en hurtig beslutning om finansieringen af coronakrisen, har ECB kastet en ny redningskrans ud til vaklende virksomheder og Italien, der trues af en ny gældskrise. ECB suspenderer nogle skrappe regler for sikkerhedsstillelse. De dårligste obligationer kan nu kan bruges som sikkerhed. Den amerikanske centralbank er gået længere i den retning, og ECB følger måske efter, vurderer Danske Bank.
Uddrag fra Danske Bank:
On the political side, the EU council meeting starting at 15:00 CEST has been one of the focal points for this week. However, with a senior EU official saying that EU council president Michel will not attempt to reach a deal today, we will focus on the stage of the discussion rather than anticipating a deal.
On top of the severe health situation in Italy there is a growing concern that it could turn into a new debt crisis, as especially Italy soon could see one or more rating downgrades due to the skyrocketing debt-to-GDP. Italy is up for review by S&P tomorrow night and with the current BBB rating a one notch downgrade would still keep it in the investment grade camp, albeit at the lowest rating possible.
The risk of Italy being downgraded to junk later this year together with a rising number of ‘fallen-angel’ Eurozone corporate bonds that lost their investment grade rating, were probably the main reasons why the ECB changed the collateral rules last night.
The ECB will now temporarily – until September 2021 – exempt bonds that are downgraded to junk from its normal requirement that bonds used for collateral should have an investment grade rating. The bold move should be positive for peripheral bonds, especially Italy and corporate bond markets today.
The Fed has gone further as ‘fallen-angel’ bonds were recently directly included in its QE programmes. We could very well see a similar change from the ECB in the future. The move from the ECB is well-timed if we do not see an EU deal today on corona bonds/recovery fund. Hence, the negative market impact of no new deal today is set to be smaller than feared.
After the setback on Tuesday risk appetite returned yesterday and global equity and credit markets rallied. 10Y bund yields rose 6bp to -0.41, which is the highest level in a week. Oil also saw support with the Jun WTI contract rising to USD15 a barrel after trading close to USD10 a barrel earlier in the day. The move came despite US crude stocks rising to a three-year high.
Last night Germany’s ruling coalition agreed on a EUR10bn new support package. VAT for restaurants will be lowered and the amount the government pays if the working week (kurzarbeit) is temporarily shortened will rise to 87% from previously 67%.
