{"id":8946,"date":"2016-06-26T00:05:36","date_gmt":"2016-06-25T21:05:36","guid":{"rendered":"http:\/\/bestinsurance.gr\/a1\/?p=8946"},"modified":"2016-06-26T00:05:36","modified_gmt":"2016-06-25T21:05:36","slug":"what-does-brexit-mean-for-the-ecb","status":"publish","type":"post","link":"https:\/\/bestinsurance.gr\/a1\/archives\/8946","title":{"rendered":"What does Brexit mean for the ECB?"},"content":{"rendered":"<div data-animation=\"no-animation\" data-icons-animation=\"no-animation\" data-overlay=\"\" data-change-size=\"\" data-button-size=\"0.7\" style=\"font-size:0.7em!important;display:none;\" class=\"supsystic-social-sharing supsystic-social-sharing-package-flat supsystic-social-sharing-content supsystic-social-sharing-content-align-left\" data-text=\"\"><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed facebook\" target=\"_blank\" title=\"Facebook\" href=\"http:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F8946\" data-main-href=\"http:\/\/www.facebook.com\/sharer.php?u={url}\" data-nid=\"1\" data-name=\"\" data-pid=\"1\" data-post-id=\"8946\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-facebook\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed twitter\" target=\"_blank\" title=\"Twitter\" href=\"https:\/\/twitter.com\/share?url=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F8946&text=What+does+Brexit+mean+for+the+ECB%3F\" data-main-href=\"https:\/\/twitter.com\/share?url={url}&text={title}\" data-nid=\"2\" data-name=\"\" data-pid=\"1\" data-post-id=\"8946\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-twitter\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><\/div><p>What does Brexit mean for the ECB?Brexit has sent shockwaves through global markets, causing huge swings in developed market currencies, hammering stocks and riskier currencies and fuelling a flight to haven government bonds, writes Lucinda Elliott.<\/p>\n<p>Central banks have already taken centre stage; the Swiss National Bank has intervened in the currency markets to cap the franc, the Bank of England, the European Central Bank, the US Federal Reserve and the Indian central bank, among others, have all promised to provide necessary liquidity to support markets.<\/p>\n<p>[expander_maker more=&#8221;\u0394\u03b9\u03b1\u03b2\u03ac\u03c3\u03c4\u03b5 \u03c0\u03b5\u03c1\u03b9\u03c3\u03c3\u03cc\u03c4\u03b5\u03c1\u03b1&#8221; less=&#8221;\u0394\u03b9\u03b1\u03b2\u03ac\u03c3\u03c4\u03b5 \u03bb\u03b9\u03b3\u03cc\u03c4\u03b5\u03c1\u03b1&#8221;]The eurozone has been hit particularly hard by the turmoil, with the Dax tanking as much as 10 per cent this morning.<\/p>\n<p>Attention has turned to the ECB, with analysts pondering what its next moves might be and what tools it has left if things get messier.<\/p>\n<p>More QE and further stimulus<\/p>\n<p>Rabobank strategists suggest the odds are increasing that the ECB will be called upon to provide yet further stimulus to support core European debt markets beyond March 2017. They say there is a \u201cnotable likelihood\u201d the bank\u2019s asset purchase programme will be extended.<\/p>\n<p>Frederik Ducrozet at Pictet, the Swiss asset manager, says \u201ctighter financial conditions and downside risks to the economic outlook are likely to force additional monetary easing, which would likely consist of:<\/p>\n<p>Verbal intervention including \u2018lower rates for even longer\u2019 and QE guidance.<br \/>\nMore favourable TLTRO-II conditions, either via a reduction in the cost of borrowing or an increase in the maximum allocation<br \/>\nNo rate cut, at least in the near-future, in light of the lingering concerns over the banking sector.<br \/>\nHowever, he warns:<\/p>\n<p>In the aftermath of the Brexit vote, such radical measures could risk fuelling anti-EU sentiment in some core countries.<br \/>\nEqually, fiscal stimulus is unlikely, meaning:<\/p>\n<p>the onus will likely remain on the ECB for now and, if it proves necessary, we would not rule out another \u201cwhatever it takes\u201d moment to preserve the euro area\u2019s integrity and ensure price stability over the medium- term.<\/p>\n<p>Roger Bootle and Jonathan Loynes at UK based research consultancy, Capital Economics, insist, the \u201cECB needs to act decisively.\u201d They also expect the central bank to \u201caccelerate in pace its asset purchases\u201d as pressure builds to provide additional support:<\/p>\n<p>Even without a Brexit, we had expected the European Central Bank (ECB) to extend the duration of its asset purchase programme (APP) later this year as growth remained sluggish and underlying inflation pressures in the currency union very weak.<br \/>\nBut a further acceleration in the pace of purchases \u2013 perhaps from the current \u20ac80bn per month to \u20ac90bn or \u20ac100bn \u2013 now seems likely. Depending on the extent of market pressures, the ECB may even implement its long-awaited OMT programme.<br \/>\nFrance\u2019s Cr\u00e9dit Agricole said a dampened outlook for the Eurozone could \u201ctrigger further ECB easing\u201d.<\/p>\n<p>More skeptical on stimulus was the Royal Bank Of Canada. The bank expressed doubts the QE programme will be \u201cupscaled\u201d and that the ECB will be able to buy more financial assets from commercial banks. In a research note they \u201cdoubt\u201d that this can be upscaled \u201csignificantly\u201d if required, and warned of possible suspension of QE purchases:<\/p>\n<p>We judge that the ECB has fewer options available now than was the case beforehand. True, the QE programme continues to be in place and will help stabilize markets, but we doubt that this can be upscaled significantly too, if required. Furthermore, if there were indeed louder voices for a similar referendum in some euro area countries, we suspect that the ECB would have to suspend the QE purchases until clarity has been reached.<br \/>\nInterest rate cut<\/p>\n<p>Both Capital Economics and RBC foresee a small cut in interest rates, with rates pushing \u201ca little further into negative territory,\u201d according to Capital Economics.<\/p>\n<p>Rabobank continues to hold their call on a 10bp rate cut in September and were \u201cnow more confident of this view\u201d.<\/p>\n<p>Mr Ducrozet at Pictet does not see a rate cut, \u201cat least in the near-future.\u201d However, given that the ECB has stated that it stands ready to use \u201call available instruments\u201d, the asset manager said a rate cut will remain a threat depending on external developments, including for the ECB\u2019s main refinancing rate currently at 0 per cent.<\/p>\n<p>Source :&nbsp; <a href=\"https:\/\/next.ft.com\/content\/e8e52c07-59f5-38c3-9375-15091d8ca6ff\">link<\/a>[\/expander_maker]<\/p>\n","protected":false},"excerpt":{"rendered":"<div data-animation=\"no-animation\" data-icons-animation=\"no-animation\" data-overlay=\"\" data-change-size=\"\" data-button-size=\"0.7\" style=\"font-size:0.7em!important;display:none;\" class=\"supsystic-social-sharing supsystic-social-sharing-package-flat supsystic-social-sharing-content supsystic-social-sharing-content-align-left\" data-text=\"\"><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed facebook\" target=\"_blank\" title=\"Facebook\" href=\"http:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F8946\" data-main-href=\"http:\/\/www.facebook.com\/sharer.php?u={url}\" data-nid=\"1\" data-name=\"\" data-pid=\"1\" data-post-id=\"8946\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-facebook\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><a data-networks=\"[]\" class=\"social-sharing-button sharer-flat sharer-flat-1 counter-arrowed twitter\" target=\"_blank\" title=\"Twitter\" href=\"https:\/\/twitter.com\/share?url=https%3A%2F%2Fbestinsurance.gr%2Fa1%2Farchives%2F8946&text=What+does+Brexit+mean+for+the+ECB%3F\" data-main-href=\"https:\/\/twitter.com\/share?url={url}&text={title}\" data-nid=\"2\" data-name=\"\" data-pid=\"1\" data-post-id=\"8946\" data-url=\"https:\/\/bestinsurance.gr\/a1\/wp-admin\/admin-ajax.php\" rel=\"nofollow\" data-mailto=\"\"><i class=\"fa-ssbs fa-ssbs-fw fa-ssbs-twitter\"><\/i><div class=\"counter-wrap arrowed\"><span class=\"counter\">0<\/span><\/div><\/a><\/div><p>What does Brexit mean for the ECB?Brexit has sent shockwaves through global markets, causing huge swings in developed market currencies, hammering stocks and riskier currencies and fuelling a flight to haven government bonds, writes Lucinda Elliott. Central banks have already taken centre stage; the Swiss National Bank has intervened in the currency markets to cap<\/p>\n","protected":false},"author":1,"featured_media":8945,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-8946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/8946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/comments?post=8946"}],"version-history":[{"count":1,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/8946\/revisions"}],"predecessor-version":[{"id":8947,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/8946\/revisions\/8947"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media\/8945"}],"wp:attachment":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media?parent=8946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/categories?post=8946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/tags?post=8946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}