Spain and Greece Will Both DefaultIt should be perfectly obvious that at some point Spain and Greece are going to default. The factors at play are ...How much longer the ECB is willing to throw good money after badHow much longer Germany will put up with ECB policyHow much longer the market will put up with this extend and pretend nonsenseHow much longer Greece and Spain are willing to put up with austerity measuresExtend and pretend can go on for years or this can all blow sky high in a month. Regardless, the implications of this setup are extremely negative.
ECB Meeting: Trichet Signals "No Panic" - Forex Analysis, Currency Forecast, FX Trading Signal - Action Forex
No rate cut and no additional liquidity measures As expected the ECB kept all its key interest rates unchanged at today's meeting. The ECB did not announce an additional LTRO (Long-term refinancing operation), when last year's one-year LTRO, at which banks borrowed EUR442bn, matures on July 1. Given the recent escalation of the sovereign debt crisis, we had anticipated that the ECB would have announced additional measures. Instead the ECB will fine tune liquidity around July 1 to smooth out liquidity conditions. The only news came during the Q&A session when Trichet revealed that the ECB would carry out its regular three-month LTROs during Q3 in a fixed rate, full allotment tender. This was otherwise changed to variable rate, fixed allotment at the March meeting. These auctions are held on 28 July, 25 August, and 29 September.
As expected the ECB kept all its key interest rates unchanged at today's meeting. The ECB did not announce an additional LTRO (Long-term refinancing operation), when last year's one-year LTRO, at which banks borrowed EUR442bn, matures on July 1. Given the recent escalation of the sovereign debt crisis, we had anticipated that the ECB would have announced additional measures. Instead the ECB will fine tune liquidity around July 1 to smooth out liquidity conditions.
The only news came during the Q&A session when Trichet revealed that the ECB would carry out its regular three-month LTROs during Q3 in a fixed rate, full allotment tender. This was otherwise changed to variable rate, fixed allotment at the March meeting. These auctions are held on 28 July, 25 August, and 29 September.
The Spanish banking sector borrows record amounts from the BCE because of the market shutout
