Independent Strategy

Tags: ECB

The monetary mutualisation of Eurozone debt (or its sovereign risk) through the ECB is becoming more likely.  The fiscal monetisation of debt through the issue of Coronabonds is becoming less likely. Monetisation is feasible.  The arithmetic works.  If you add up all projected fiscal deficits in the Eurozone for this year, the total comes to almost exactly the fire power the ECB has approved.

Unsurprising to see overall loan demand and supply conditions little changed with weaker corporate demand offset by stronger demand on the consumer side.  While banks expect corporate loan demand to pick up in the second quarter looking at underlying economic conditions this seems quite optimistic,

Eurozone

REPORT » 8th March, 2019 » Contradictions

Faltering growth and undershooting inflation expose the contradictions of the ECB’s current policy approach. Despite Draghi’s insistence, they remain well…

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