Chart of the Week: ECB to end QE-fuelled balance sheet expansion

first_imgHowever, while the central bank will stop growing its balance sheet through asset purchases, it will not stop buying assets entirely. The European Central Bank (ECB) yesterday confirmed its decision to halt its asset purchasing programme – better known as quantitative easing (QE) – as of 19 December 2018.Starting in 2009 with covered bond purchases, the ECB has since bought trillions of euros worth of assets in an effort to maintain liquidity in financial markets, buying up public sector, corporate and asset-backed securities.The purchases totalled more than €2.5trn, according to Mirabaud Asset Management, more than doubling the ECB’s balance sheet to €4.7trn – equal to roughly 40% of euro-zone GDP.The policy was maintained through Europe’s sovereign debt crisis but has been scaled back gradually since 2016. At the start of this year the ECB’s monthly purchases halved from €60bn to €30bn. They were reduced again to €15bn a month from September. Source: ECBAt yesterday’s press conference, ECB president Mario Draghi said: “We intend to continue reinvesting, in full, the principal payments from maturing securities purchased under [QE] for an extended period of time past the date when we start raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.”In a note issued yesterday after Draghi’s press conference, Mirabaud’s strategy team said: “Both this stock and signalling effects will help keep sovereign yields in the euro-zone low during this normalisation phase.“Hence, the ECB follows the path drawn at the time by the Federal Reserve by strengthening its forward guidance and by guaranteeing a very accommodative monetary policy until at least 2020.”The ECB’s asset purchases since 2015center_img Source: ECBKey: PSPP – public sector purchase programme; CSPP – corporate sector purchase programme; CBPP3 – third covered bond purchase programme; ABSPP – asset-backed securities purchase programmeInterest rates remain at all-time lows. The rate on the bank’s main refinancing operations is zero and has been since March 2016, while the rate on its marginal lending facility has been 0.25% since then. The deposit facility rate turned negative in June 2014 and reached -0.4% in March 2016.ECB’s interest rate 2008-18(main refinancing operations)Chart MakerDraghi said yesterday: “We continue to expect [interest rates] to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.”last_img read more

Suarez disrespected club – Rodgers

first_img Press Association Suarez’s future has been cast into doubt over the last 36 hours with the former Ajax man threatening to hand in a transfer request and possibly take the club to a tribunal if he is not allowed to leave Anfield. Speaking after Wednesday night’s 4-1 friendly win over Valerenga in Oslo, Rodgers was quoted in several national newspapers as saying: “There were no promises made – categorically none – and no promises broken. The club and his representatives had several conversations and he knew exactly where he was at. Liverpool boss Brendan Rodgers has accused Luis Suarez of showing “total disrespect of the club” and vowed to take “strong, decisive action” following the Uruguay striker’s claims that he was promised a move if the Reds failed to qualify for the Champions League.center_img “I will take strong, decisive action. There has been total disrespect of the club – this is a club that is historically one of the biggest in the world and has given him everything; absolutely everything. “I don’t believe there is a clause in his contract that says he can leave for any sort of price.” Suarez insisted in newspaper interviews on Tuesday that he had a clause in his contract whereby he could leave Merseyside if a Champions League club were willing to offer £40million – a sum Arsenal offered plus an extra £1. But the club maintain the £40million mark was the point at which they had to inform the player of an approach and was the basis for the beginning of negotiations should they wish to sell. Suarez will reportedly be made to train with the reserves following his outburst. Asked whether there was any way back for the 26-year-old, Rodgers responded: “We first of all need to assess where (the situation) is. Things have been said that are derogatory against the football club, his team-mates and the supporters. “There’s a few bridges to cross before that (playing for Liverpool) can happen again. It’s about respect – that’s the only thing we look for. This is one of the most iconic football clubs in the world. You can’t disrespect it.” On the prospect of an apology, he added: “That’s something I will ensure before anything happens in the future.” Suarez has been a controversial figure since arriving from the Amsterdam ArenA in January 2011, serving a suspension for racially abusing Manchester United’s Patrice Evra and, more recently, being banned again for biting Chelsea’s Branislav Ivanovic. last_img read more

Odemwingie faces long-term absence

first_img Odemwingie was carried off on a stretcher during the Potters’ Barclays Premier League victory at champions Manchester City last Saturday. Hughes initially expressed hope the problem was not serious but now it has emerged the 33-year-old Nigeria international will need an operation. As yet no timescale has been put on his recovery but the club have not included Odemwingie in their 25-man Premier League squad, meaning he cannot be registered to play until January at the earliest. Hughes told the club’s website, “He’s going to have some kind of procedure but the medical staff are waiting for the knee to settle down. “He’s going to have to wait a couple of weeks before it’s actually done but once the operation is done we know he will work extremely hard to get back. “It’s a significant injury and unfortunately it’s a long-term one, but Peter has a great attitude to work and life in general – he’s always got a smile on his face – and he’s going to need those qualities. It will be a long road back but we wish him well.” Odemwingie only entered the action as a half-time substitute at the Etihad Stadium and almost set up a second goal for match-winner Mame Biram Diouf. But he was injured in the process and was himself substituted after 65 minutes. Odemwingie appeared to have settled well at Stoke following his move to the Britannia Stadium last January. His three-year spell at West Brom ended in acrimony a year ago and a subsequent switch to Cardiff failed to reignite his career. Stoke forward Peter Odemwingie is facing a lengthy spell on the sidelines with a knee injury, manager Mark Hughes has revealed.center_img Press Associationlast_img read more