Bank Research Consensus Weekly 12.13.11
Post EU Summit: A Marathon, Not a Sprint
Elga Bartsch & Daniele Antonucci, Morgan Stanley
There can be no mistaking that the key decisions taken by European leaders at the EU Summit, i.e., the commitment to a new ‘fiscal compact', might well, with the benefit of hindsight, one day be viewed as the key step towards a fiscal union in the euro area. At this stage, however, progress towards such fiscal union - as well as the shape it might eventually take - is far from certain, we think.
ECB Takes Bold Measures On Banks But Not On Sovereigns
Peter Possing Andersen, Senior Analyst, Danske Bank
At this week’s monetary policy meeting the ECB cut rates by 0.25% to 1.00%, introduced 36M LTROs and eased collateral requirements for banks. However, the main issue was Mario Draghi’s comments on the sovereign bond purchase programme (SMP). Here the market had hoped for an opening or a hint that the ECB could step up the SMP next week if the EU summit delivered progress in terms of fiscal integration in Europe.
Cleanest Dirty Shirt in the Closet
John E. Silvia, Chief Economist, Wells Fargo
Treasury rates fell after S&P issued another warning on credit ratings for the European Union. This observation underlies one of the themes in our annual outlook: The U.S. outlook for growth, inflation and interest rates continues to become more, not less, intertwined with global developments. In fact, we see the greatest risk to the U.S. outlook to be the problems in Europe.
Bank of Canada: How To Reiterate A Message And Say New Things At The Same Time
Jacques Marcil, Senior Economist,TD Bank Financial Group
As uncertainty spreads among Canadian households and businesses, increased attention is being paid to announcements by the Bank of Canada. This week, the Bank was in the news on separate days for two different reasons, but the message it sent out was quite consistent.
Compiled by David Song, Currency Analyst
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