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  • 07-05-2009 12:03pm
    #1
    Économiste Monétaire
    Closed Accounts Posts: 2,208 ✭✭✭


    The BOE will increase their Quantitative Easing policy by £50bn (from £75bn to £125bn) and the headline rates are unchanged. (Link.) The ECB will make an announcement on unconventional policies today, it's expected that the minimum bid rate will fall to 1% either way.


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    #2
    Économiste Monétaire
    Closed Accounts Posts: 2,208 ✭✭✭Économiste Monétaire


    ECB headline rate down by 25bps to 1%. Marginal lending rate down by 50bps.


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    #3
    Saabdub
    Closed Accounts Posts: 228 ✭✭Saabdub


    So is this the bottom of the cycle? And if so how long do we have before the ECB detects signs of demand in the Eurozone and starts to tighten again?


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    #4
    Économiste Monétaire
    Closed Accounts Posts: 2,208 ✭✭✭Économiste Monétaire


    Trichet has announced an extension on LTROs to 12 months, based on the stated minimum bid rate at the auction date. So, that's a signal to your question that rates won't be going up for some time, i.e. until late 2010 at the earliest, considering the first 12 month LTRO auctions won't happen until June. The ECB is also going to buy euro-denominated covered bonds, not much on that point though.

    Edit: He just gave an approximate figure of €60bn in covered bonds to be purchased.


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