The european central bank will probably gradually reduce their aktivakjøp before the end of the quantitative lettelsene, and they will probably make the step of the size to ten billion euros a month, could Bloomberg report on Tuesday evening.
The quantitative lettelsene (see information below) shall after the plan ends in march 2017.
central Bank are now buying bonds for up to 80 billion euros, approximately 719 billion in Norwegian kroner, each and every month.
Danske Bank writes in a note that the news came as a surprise, because governor Mario Draghi previously said that the central bank had not discussed these issues.
the Messages got the euro to strengthen significantly against the dollar (see graph lower case).
German bonds (10-year) reached almost its highest level in two weeks, and increased by 3 basis points. Us bonds rose by six basis points.
gold prices got a boost on Tuesday.
Before the messages from the ESB cost a ounce (31,2 gram) 1.310. Wednesday morning is the 1.270.
** Includes the purchase of securities, and called popular pengetrykking (or QE).
** the Purpose of quantitative easing is to stimulate the economy. Quantitative easing helps to keep long-term interest rates low.
** Low interest rates make households ‘and companies’ interest costs fall, making that businesses and households can invest and consume more.
** government bond yields also fall, which means that the state can take up loans at lower interest rates. This will decrease the state’s expenses to operate the debt and the government can increase consumption and investments.
** Quantitative easing weakens the exchange rate.
Gullprisene has risen sharply in the past year. With turmoil in other markets, many have sought safe haven in the precious metal. And experts are predicting years-long decline.
Believe in tapering off in april
chief strategist Ric Spooner at CMC Markets in Sydney writes in a note that the international bond market “seems to be in a phase where the nervousness around that central bank-stimuli end, weighs heavier than the positive effects of short-term measures to temporarily expand the stimulien. This is reflected when bond yields increase and the gold price goes down,”, according to Reuters.
DNB writes in his morgenrapport Wednesday that they believe the ECB “clearly winding down, but not until april next year”.
– I have to say that the ECB, through official channels have been clear that they should be at the current level of quantitative easing out march 2017, if necessary, longer if they think you have to in order to get the up inflation, says chief economist Øystein Dørum in DNB Markets, to E24.
– May have been misunderstood rumors
A while after the messages were known, tvitret however, a spokesperson of the ECB, Michael Stern that the central bank had not discussed to reduce the pace of its monthly obligasjonskjøp.
chief economist in DNB markets, Øystein Dørum.
– It’s probably not 100 percent true that they have not discussed it, because they must have had discussions downwards in the system about how and when they will end kvatitative easing program, for example, whether to stop abruptly or not, ” says Dørum.
This may simply have been misunderstood rumors, either from Bloomberg or those who interpret the the article writing.
DNB is still standing by its estimates that it will see gradually improved in the euro zone forward, which means that they can tread a little lighter on the gas.
– We said in august that the ECB will throw in the towel soon, as the central bank of Japan is already partially done.
– We are not able to time these obligasjonskjøpene perfect, but we estimate that they are going to wind down obligasjonskjøpene from march 2017 to august 2018. The first six months, we estimate that they are buying 60 billion, followed by 40 and then 20. But quantification of this is really a pointless exercise.
Nordea writes in his morgenrapport Wednesday that statements from the ECB “hardly should be seen as a hint about tapering, but rather than assessment of how the ECB should step down program when the time comes.”
does not enlargement
the central Bank ruled out that the quantitative lettelsene, however, may be extended beyond the provisional end date in march 2017, with a top speed of 80 billion euros a month.
“In our view, it is too early to discuss tapering off and we expect that the central bank kunngjører an expansion of the purchases by means of quantitative easing by six months during a meeting in December. Nevertheless, increasing inflation lead to speculation about whether the ECB can do “less rather than more””, writes Danske Bank in a note.
Await inflation at 1.2 per cent
the ECB expects inflation at 1.2 per cent in the first quarter of 2017, but is 0.7 percentage points of the increase is expected to come due to increased oil prices, according to the ECB.
“the Increase will thus not imply that the ECB has seen a sustained adjustment in the inflasjonsretningen, and thus put an end to the quantitative lettelsene. Instead, it is likely that the ECB will remain focused on low kjerneinflasjon, which will not rise to its historical average as the ECB expects next year”, writes the Danish Bank.
Inflation in the eurozone has proven to be very stubborn and resist all the attempts that the ECB has done to raise it.
the european central bank’s inflation target is 2 percent – that sees the central bank that inflation will be far lower than the goal in the foreseeable future.
Earlier in september held Draghi key rates and obligasjonskjøpene in the eurozone unchanged.
Then said the central bank that it is waiting to keep the three nøkkelrentene at the current or lower level for a long time to come, and longer than the time horizon which is set for obligasjonskjøpene that the bank makes.
STRENGTHENED the EURO: on Tuesday night there was a jump in the valutakrysset between the dollar and the euro.
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