More On Euro
November 27th, 2013 7:17 am | by John Jansen |Mark Chandler at Brown Brothers Harriman has a reason for the Euro strength that I had not observed elsewhere on the world wide web. He cites newspaper reports indicating that the ECB might establish a facility similiar to the UKs funding for lending facility. That implies that the ECB would not have to play the negative rates card so quickly.
Here is his note:
Via Mark Chandler at Brown Brothers:
There has been some press reports suggesting that the ECB is considering a new facility whose access is conditioned on new loans. This would be similar to the UK’s funding-for-lending program. This may be seen as euro bullish because it illustrates the fact that there are a number of other options for the ECB before having to really confront a negative deposit rate or outright bond purchases, which have been the subject of much speculation in the markets.
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