The main event today was the second auction of liquidity provision by the ECB, the so-called TLTRO (Targeted longer-term refinancing operations). These ECB’s operations are intended to stimulate the provision of credit by European banks, through the injection of liquidity in the interbank market to near 0% interest rates. The first operation took place in September, but banks only required 82 600 M. €, which was well below the 400 000 M. € which were the maximum ceiling that the ECB was willing to give. The European institutions asked the Central Bank for 129 840 M. €, aligned with the estimated value which was expected between 100 000 M. € and 170 000 M. €. A portion of the amount requested today will be applied to replace the loans requested from the ECB 3 years ago and which mature in the coming months and may not represent additional liquidity in the banking system. The outcome of today’s auction may influence the ECB’s decision on the adoption of a sovereign debt purchase program. That the request is deemed low, then the ECB will have more arguments to implement new measures of monetary stimulus, so that the balance of this institution reaches 3 000 000 M. € as intended.
Stock Markets – Daily Note – 11/Dec