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11 Dec 2014
Any high liquidity boost from TLTRO unlikely – Danske
FXStreet (Barcelona) - The Danske Bank Research Team notes that it is unlikely that ECB will get a high liquidity boost from the TLTRO, and expects it to use government bond purchases to get a meaningful increase in its balancesheet.
Key Quotes
“The long awaited result of the second TLTRO will be announced at 11:10 CET. We look for a take-up of only EUR120bn, a bit lower than the consensus estimate of EUR148bn (according to Bloomberg). However, we need to see the repayment of the LTRO on Friday as well to see the net effect on liquidity from the TLTRO. It is unlikely that the ECB will get a high liquidity boost from the TLTRO and it is expected to need to use government bond purchases in the new year to get a meaningful increase in its balance sheet. We now look for government bond purchases already in Q1 15.”
Key Quotes
“The long awaited result of the second TLTRO will be announced at 11:10 CET. We look for a take-up of only EUR120bn, a bit lower than the consensus estimate of EUR148bn (according to Bloomberg). However, we need to see the repayment of the LTRO on Friday as well to see the net effect on liquidity from the TLTRO. It is unlikely that the ECB will get a high liquidity boost from the TLTRO and it is expected to need to use government bond purchases in the new year to get a meaningful increase in its balance sheet. We now look for government bond purchases already in Q1 15.”