Discover and read the best of Twitter Threads about #ECB

Most recents (24)

ECB’s Knot: 25 bps rate hike in July is realistic. 50 bps rate hike should not be excluded if data in next few months suggests that inflation is broadening, accumulating.
US Dollar Index falls 0.6% to 103.52, euro rises above 1.05 vs dollar, up 0.7% on day. $EUR $USD #ECB
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2021 Ocak #DXY 89 gördü.
Eğer ki bu nasdaq düşüşleri 2021 de gelseydi, benim için dünya şuan çok farklıydı. Neyse nasipte yokmuş
Niçin 2021 de gelmedi?

2021 Şubat ayı itibari ile #Kriptolar dünyaya servis edildiler. Bütün dünya oraya odaklanınca buraları yönetmesi ++
Adamlara kolay oldu..
Buraları stabilleştirip kriptolar ile dünyayı bir yıl geçiştirdiler. Negatife dönen bizim gibi insanları da swap ile avlamaya kalktılar. Kriptolar ile de risk iştahı tavan yaptı ve küresel faizler yukarı gittiler.
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It was a pleasure to present first thoughts of my master's thesis on #MMT and #degrowth at the @WSSAcon in Denver. I’m currently writing my thesis at @presseunikassel and @LevyEcon. I’d happy for any comment and feedback. A thread 1/
When the government spends, it must either collect #taxes or take on #debt – so the widespread assumption. A growing economy does not pose a problem, as long as g > r the debt-to-GDP ratio declines over time, particularly if loans have low interest rates and long maturities 2/
However,if the economy stops growing or if it even declines, the debt ratio rises and tax revenue declines. If one assumes that the economy should not grow endlessly for socioecological reasons #degrowth @timparrique @MGSchmelzer, how can government spending then be financed? 3/
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Finally out! On the European Central Bank, technocracy, and one of the most painful chapters in European integration: the #ECB’s treatment of sovereign debt (going from 1988 till 2020)

A quick summary 👇 /1
In 2005, the ECB’s treatment of sovereign debt became market-based. From then on, any government whose debt lost the approval of Moodys, S&P and @FitchRatings would no longer be accepted by the ECB /2
These strict rules placed the ECB right at the heart of the 2010-12 sovereign debt panic.

Using interviews and new archival sources I ask: Why didn’t the ECB do more to stabilize markets? And why was one mid-March video call enough to stop the 2020 panic? /3
Read 14 tweets
The #ECB waits and see.

#APP might be concluded in the third quarter of 2022. Or not.
At any rate there is no end date in sight for the end of reinvesting

Here is the carefully worded statement
Interest rates will remain at current levels until well after APP is over, meaning at least all of 2022. Possibly longer
Read 5 tweets
A quick worst-case scenario on economic repercussions of the possible Russian-Ukrainian war. Thread.

1) West likely to respond with sanctions, possibly even shutting Russia from the interbank transaction system SWIFT.
2) Russia would respond by shutting gas to Europe. 1/5
3) This would lead to a massive spike in energy prices in Europe pushing the continent into a recession with high #inflation pressures (stagflation).
4) Inflation would reach double-digits within 2-3 mo.
5) Asset markets would fluctuate heavily first, then crash.
6) Rampant inflation would force the #ECB to rise rates in a rapid manner and stop PEPP and QE.
7) The European banking sector would crumble.
8) Sovereign yields would explode.
9) The Eurozone would unravel.
10) Europe would fall into a depression.
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🇪🇺 #ECB Meeting (1) | Lagarde conference was more hawkish than ECB statement as she clearly opens the door to some adjustments.
*It suggests that the governing council is feeling uncomfortable with #inflation.
*It suggests that a hike in 2022 is no longer excluded.
🇪🇺 #ECB Meeting (2) | Markets reacted immediately and are now pricing a hike in June.
🇪🇺 #ECB Meeting (3) | It looks extreme. My view remains that #inflation will be higher than expected but there is nothing in the data right now that suggests it won't normalize from H2.
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🇪🇺 Christine Lagarde sent a clear warning to the market which suggests that the #ECB is still unlikely to hike rates anytime soon.

🇪🇺 🇺🇸 There are at least four big divergences with the U.S.:

1/ Most of #inflation comes from #energy prices (~50%) as the EU is more dependent. After winter and/or if geopolitical tensions ease, the effect should reverse creating huge negative base effects in 2H22.
2/ In Eurozone, market #rents are not rising by 15% or more YoY and it will never happen ⚠ with several cities already implementing caps.

3/ Positive base effect from the spike of German VAT will normalize.
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Thanks to @GeoffCutmore, @cnbcKaren & the #SquawkBox team for having me on this morning's show.

We discussed #bonds & #centralbanks, touched on #supplychains & talked of #Growth's vulnerability, #commodities' appeal.

Slide deck follows:-

Is your box still backed up in port? How much does the onward haulage cost? What happens to #freight rates after #LNY/#Beijing2022?
The bet is that #energy cannot *possibly* rise as far and fast this year as last, but what about all the other inputs? To what extent are these and other costs yet to be passed on?


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On sidelines and in society, they are discussing that a war may start in #Ukraine, and the #Fed will raise rates ahead of time. How will this end for the markets?

Spoiler alert: the Russian market could be halved. #MOEX

Thread 🧵👇
Judging by experience of falls of past years, Russian market may fall by another 30% -50% from current levels.

• 2008 #RTS index fell by 80%
• 2014 - by 50%
• 2020 - by 50%

Market has corrected by 22% from the local maximum - potential for a fall by 30% remains.
Growth of quotations this week is unlikely:

• Quadruple witching - expiration of futures and options can become a point of trend reversal (as it was in March 2020).

💵 Wednesday: Fed meeting. If #Fed announces acceleration of monetary tightening, it could collapse markets.
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Zor geçeceğini söylediğim hafta Türk lirası için stresli bir şekilde başladı bile. 😔

Zaten birçok yerde yazıldı, ama bu haftaya ilişkin dikkatimi çeken gelişmelerin başlıklarını kısaca yer vereyim.

1) 20'ye yakın merkez bankası toplantısı bizleri bekliyor. Önemli olanlar:
2) #FED toplantısı için beklenti çok önceden oluşmuştu zaten. Daha sert hatta öncekilerden farklı bir enflasyon söylemi ve varlık alımlarında artış bekliyorum.

#ECB açısından merkez ve çevredeki farkların artması sıkıntı yaratmaya başlayacaktır artık.

#BOE ise erteleyecek gibi.
3) #Omicron varyantı için sonuçların gelmesinin en az iki hafta süreceğini düşünüyordum ve yaklaşan tatil sezonu öncesi risk algısı daha yüksek olduğu için piyasalar biraz daha satış ağırlıklı hareket edebilir yönünde görüşler var.
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#EUR Crosses & dovish #ECB:
▪️ EURUSD claims next big fig; on 1.13-handle; most FX stronger vs EUR (chart vs Nov FOMC)
▪️ ECB to increase upper limit for cash as collateral for Securities Lending (75 to 150bn)
▪️ LAGARDE: Conditions for rate hike very unlikely to be met 2022

1/8 ImageImage
f/e Euro bond futures lower on doubling of limit to 150bn for cash as collateral=>possible easing of collateral shortage in repo mkt

But last utilization only 15.5bn (Sep monthly avg) & peak daily util 40.8bn (Jun21)

DU Euro Schatz ~2y
OE - Euro Bobl ~5y
RX - Euro Bund ~10y Image
▪️ pandemic challenge isn't over yet
▪️ energy >50% of headline inflation
▪️ inflation boost from reversal of German VAT cut to fall out of calculations from Jan22
▪️ wage growth next yr potentially rising somewhat more...but risk of second-round effects remains limited Image
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I've been expecting a global economic crisis since early 2017. That's when we essentially discovered that the recovery after the GFC had been "hollow".

The thing that caught our eye was the non-recovery of the global debt issuance. 1/10
In September 2017, we had learned that #China had been driving the global economy since 2009, with massive and utterly unsustainable debt stimulus.

Also that the growth of global productivity had stalled in 2011, and it has never recovered. 2/…
And, in December 2017, we envisaged the path of the global economic collapse, or the 'perfect storm'.

Yet, the world economy is still standing. What went wrong? 3/…
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#ECB's De Cos: Current conditions don't allow for rate hike in 2023. $EUR
#ECB's De Cos: Conclusion of FT report incompatible with ECB guidance. $EUR
#FYI: FT headline says unpublished ECB inflation estimate raises prospect of earlier rate rise.
#ECB inflation outlook likely to be revised higher, doesn’t see 2% price goal reached in medium-term: Kazaks
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Our #inflation forecasts from March on plus the ultimate scare: the possibility of a hyperinflation.

The "shock" was plainly visible in prices of online products and, e.g., shipping 👇. When economies opened, it materialized. 1/4
@GnSEconomics #economy…
By June, it was clearly visible that the source of #inflation had moved from "want to have products" to, e.g., food, rents and fertilizers, that is, to "need to have products", which would be reflected on wages

Alas, inflation was here to stay. 2/…
But, what truly worries us, is the possibility of a very rapid #inflation , or hyperinflation. It's pre-requisites are:

1) Vast issuance of central bank credit, like QE, and
2) Diminution of production possibilities. 3/

Both are here now. 🥶…
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Tag 501 nach Merkels *außergewöhnlicher Situation* in der Schuldenbremse & Tag 493 der EU-#Notfallklausel

In Deutschland 🇩🇪 steigt RKI-Inzidenz (Berichtsdatum) +0,5 auf 14,4 | Wochenrate +33% auf +29% | "RKI Offiziell" +0,1 auf 14,5 | 49% Vollgeimpfte mehr als in USA #C_Notizen
In UK 🇬🇧 sinkt es weiter, seit dem 21.07. um 118 (-24%)
in Niederlanden🇳🇱 fällt es seit dem 19.07. um 182 (-44%)

Frankreich 🇫🇷 kurz vor 200, könnte nächste Woche RKI-Risikogebiet werden, Stagnation in Spanien 🇪🇸 (über das Wochenende!) und in Österreich 🇦🇹... #C_Notizen
Der R-Wert des RKI in Deutschland 🇩🇪 sinkt weiter... Das Niveau dürfte aber noch nach oben revidiert werden, gleichwohl sinkt die 4-Tage-Rate der 7-Tage-Inzidenz von 1,14 auf 1,11... Was den sinkenden Trend bestätigt... #C_Notizen
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What's happening? The @ecb has just published the outcome of its 18-month monetary policy strategy review! Including what it plans to do on climate 🌍🌳

Quick thoughts: A THREAD
(1/20) Image
Quick recap: shortly after @Lagarde became the ECB president, the bank announced its first review of monetary policy strategy since 2003, to focus on the fascinating topic of 'close to, but below 2%' inflation target, but also on 'new topics' for CBs such as #ClimateCrisis (2/20)
In response, @NEF together with civil society partners including @PositiveMoneyEU and @350Europe developed a blueprint for the ECB a - our '5 asks' on incorporating #ClimateActionNow into the #ECB monetary policy operations (3/20)… Image
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Is there an incoming policy error by the Federal Reserve? $DXY #FederalReserve #Dollar #Policy #Fed

Thread 1/
Over the past several weeks, we have seen significant Central Bank actions globally. This reflects a market flush with cash and a desire by the Federal Reserve to hold short-term rates positive. 2/
Mid-June 2021 FOMC Summary:
1. Unchanged rate and QE policy
2. Reverse Repo rate increase to 5bps
3. IOER increase to 15 bps
4. Dot plot showing rate hikes sooner than expected
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The $DXY? Medium-term #Bullish, Long-term #bearish
1) Medium Term: #Fed Hawkish, #ECB Dovish
As the Federal Reserve begins discussing tapering, the ECB is still providing stimulus. A hawkish Fed is confirming a stronger economy while the ECB confirming weakness.
2) Medium Term: Treasury General Account Drawdown Largely Over
$300mm remaining with $750bn already done, causing this downward pressure on the $DXY to wane
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A long thread on the dominance of #centralbanks over our economies.

It should be reminded that central banks were never planned to have such a massive role in the #economy .

The idea of the central bank was born in the Middle-Ages, when failures of the... 1/23
...largest merchant banks of that era, founded by the Bardi and Peruzzi families, shocked the Italian City-State of Florence in 1343 and 1346.

These financial crises gave birth to the idea that the commercial banking sector would need a ‘liquidity backstop’, i.e.,... 2/ entity that could lend to private financial institutions in trouble. This was the original aim of central banks: to act as ‘piggy banks’ for commercial banks.

The first central bank that resembled the modern ones emerged in 1609, when the Dutch empire... 3/
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The debtor, the creditor and the central bank.

A contemporary (& sad) fable by the lighting @AniceLajnef [Thread]

On reading our friend Anice's Thread on Twitter, we had to echo it
📣 Enjoy your reading! 👇
#greedyfinance ☠️
Let's imagine a spendthrift individual who constantly borrows money subject to interest. The usurer assesses the individual's profile and decides to lend him €100 against a written and signed promise: "I undertake to repay €120 in 1 year whoever presents this paper to me.
"Why is the usurer asking for a premium of €20? Because he knows that the individual is a big spender and has a lot of debt, so there is a high risk that he won't pay it back.

Let's say he estimated at 15% the probability of never getting his money back on this type of profile.
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Tag 437 nach Merkels *außergewöhnlicher Situation* in der Schuldenbremse & Tag 429 der EU-#Notfallklausel

In Deutschland 🇩🇪 sinkt die RKI-Inzidenz: -3 auf 63 (Berichtsdatum). Niedrigster Wert seit 24. Februar... "RKI Offiziell": -2 auf 63 #C_Notizen
In Lateinamerika beschleunigen sich die bestätigten Ansteckungen, Indien Flagge von Indien entspannt sich... In Europa haben jetzt alle Länder (mit Litauen Flagge von Litauen als Nachzügler) eine Inzidenz von weniger als 200... #C_Notizen
In Österreich ist gestern die Inzidenz auf 48 gesunken... Wien auf 42... #C_Notizen
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#Italy's Draghi cannot pass promised reforms, says League's Salvini
- Draghi will not be able to enact key reforms demanded by the European Union because his unity government is too divided over the issues, rightist leader Matteo Salvini said on Saturday…
#Italy’s premier cannot pass promised reforms – rightist leader | May 15, 2021
- “In any case, it won’t be this government that reforms the justice and tax system,” #Salvini told La Repubblica daily,…
Italy's #Draghi cannot pass promised reforms, says Salvini | May 15
- Draghi has promised Brussels that he will push through an ambitious reform drive to secure more than €200B from the EU recovery fund, aimed at helping countries overcome the coronavirus…
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