Short comment
This Thursday, ECB pronounced pretty dovish message, leading global fixed income markets to heaven. Yields of 10Y US T-Note and 10Y German Bund ended this week at 2.6285% and 0.069%.
The institution specified their view about regional economy by lowering its expected economic growth of Eurozone to 1.1% from 1.7% for this year. Sluggish economy with uncertainties including Brexit, Trade-war and Italian political turmoil led the institution to make additional easing, TLTRO-III. Maturity of the loans for the regional banks will be 2 year.
Additional point is continuation of reinvestment of revenues from the institution's balance sheet. Everyone had worried about drying liquidity in the markets. Mr. Draghi's statement sent another message about no need to worry about it, at least not yet, to the markets.
The liquidity party does not end yet. I believe that worry of some big-shots like Jay Powell or Larry Pink about the direct provision of the money from central banks is reasonable, but we do not need to lack of the liquidity itself.
This Thursday, ECB pronounced pretty dovish message, leading global fixed income markets to heaven. Yields of 10Y US T-Note and 10Y German Bund ended this week at 2.6285% and 0.069%.
The institution specified their view about regional economy by lowering its expected economic growth of Eurozone to 1.1% from 1.7% for this year. Sluggish economy with uncertainties including Brexit, Trade-war and Italian political turmoil led the institution to make additional easing, TLTRO-III. Maturity of the loans for the regional banks will be 2 year.
Additional point is continuation of reinvestment of revenues from the institution's balance sheet. Everyone had worried about drying liquidity in the markets. Mr. Draghi's statement sent another message about no need to worry about it, at least not yet, to the markets.
The liquidity party does not end yet. I believe that worry of some big-shots like Jay Powell or Larry Pink about the direct provision of the money from central banks is reasonable, but we do not need to lack of the liquidity itself.
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