HALISTER1: ECB to Extend QE, Change Modalities in December: Credit Agricole

ECB to Extend QE, Change Modalities in December: Credit Agricole

(Bloomberg) -- Extension of QE, in addition to scrapping of deposit rate floor for bond purchases and an extension of issue share, should be announced in December, Credit Agricole strategist Louis Harreau writes in research note.
  • December will see QE extension to September 2017 or beyond if necessary
    • Deposit rate floor for purchases to be removed
    • Extension of share issue (to 40% from current 33%) to be enacted
    • Capital key repartition may be removed later, although consensus too complex to find yet
    • TLTRO II will continue as announced until March 2017; ECB may announce a third TLRTO series in near future
    • Other options should not be ruled-out
  • December ECB staff projections may be interesting; risk is that ECB will slash inflation forecasts, thereby deepening use of monetary policy tools
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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2539Z GR (European Central Bank)

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Louis Harreau (Credit Agricole SA)

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