EZA927/13Jan10: ECB 14 January Council Preview EZA STILL SEES ECB's 'REFI' RATE UNCHANGED AT LEAST TO MID-2010 - WHEN LIQUIDITY MANAGEMENT PRESENTS A NEW CHALLENGE - AND EVEN BEYOND
EZA927/13Jan10: ECB 14 January Council Preview
EZA STILL SEES ECB's 'REFI' RATE UNCHANGED AT LEAST TO MID-2010 - WHEN LIQUIDITY MANAGEMENT PRESENTS A NEW CHALLENGE - AND EVEN BEYOND
· Modest but unbalanced pick-up in activity in Q3 confirmed, but further weakening of monthly indicators of activity in Q4 point to at best fitful and uneven recovery.
· Return to positive 'headline' inflation and stabilising 'core' inflation, while inflation expectations continue to firm up.
· Broad money growth turns negative and outstanding loans to non-bank corporations are cut back further but lending to households picks up slightly.
· EZA continues to expect ECB to remain in wait-and-see mode, keeping rates on hold at least through first half of 2010, while preparing to deal with potential liquidity squeeze when June 2009 12-month refinancing operation of EUR 442 bn matures on 1 July.
Please see the attached our regular analysis from John Arrowsmith as a pdf file to read onscreen or simply print and read at your convenience.
John Arrowsmith: ECB / Regulatory
Tel: +44 7720 59 1726
john.arrowsmith@eurozoneadvisors.com
Discussion Partners
John Arrowsmith: ECB / Regulatory
Tel: +44 7720 59 1726
john.arrowsmith@eurozoneadvisors.com
Dr Michael Clauss: Germany Politics / Economy / Equities Sectoral Analysis
Tel: +49 89 64254046
michael.clauss@eurozoneadvisors.com
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