ECB delivers bold measures but sees the ball primarily in the field of fiscal policy

Today the ECB delivered a comprehensive policy package consisting of additional LTROs, TLTRO III targeting SMEs, a temporary increase of QE by cumulatively € 120 bn skewed towards CSPP until year-end and some regulatory easing for banks. It refrained from cutting the deposit rate.

Highlights:

  • Today the ECB delivered a comprehensive policy package consisting of additional LTROs,
    TLTRO III targeting SMEs, a temporary increase of QE by cumulatively € 120 bn skewed
    towards CSPP until year-end and some regulatory easing for banks. It refrained from cutting
    the deposit rate.
  • The Covid-19 shock is seen as temporary and monetary policy makers look for a V-shaped
    development, while seeing the risks clearly tilted to the downside.
  • The Governing Council, however, sees the ball for supporting measures in the field of
    governments and urged for “ambitious and coordinated fiscal policy response”.
  • Looking ahead, only in case of a longer lasting crisis the ECB would probably think about
    additional policy measures.

Download the full publication below

ECB DELIVERS BOLD MEASURES BUT SEES THE BALL PRIMARILY IN THE FIELD OF FISCAL POLICY

RELATED INSIGHTS

CHINA’S RECOVERY CONTINUED BUT A BIT SOFTER THAN EXPECTED
China's economic recovery continued in Q3 2020, although a bit softer than expected. Real GDP growth rose to 4.9% yoy, slightly below the Reuters consensus expectation of 5.2% yoy, but still a substantial upturn from the 3.2% yoy in Q2. On a quarterly base, growth dynamics softened to 2.7% qoq, after 11.7% qoq and -10% qoq in the two previous quarters.
Citywire video-interview with Peter Marber
Watch Peter Marber, fund manager of this global, non-directional, long/short approach to Emerging Markets debt, in a video-interview by Citywire.
COVID-19 FACTS & FIGURES
According to the IMF’s Managing Director, strong international cooperation on coronavirus vaccine could speed up the world economic recovery and add $9 trillion to global income by 2025. A WHO trial found that Remdesivir, Hydroxychloroquine, Lopinavir and Interferon have little or no effect on hospitalized Covid-19 patients. Gilead Sciences has questioned the findings of the WHO study saying data appeared inconsistent.