Nick Kounis, head of financial markets research at ABN AMRO, suggests that an extension of the current TLTRO programme has been part of their base case for the ECB in past few months, mainly based on the view that commercial banks will find it difficult to fully refinance the TLTRO funds in private sector debt markets.
“Given the sharp slowdown in eurozone economic growth, the prospect of shrinking excess liquidity (which would occur from June 2020) also seems less desirable, and if anything the prospect of a fresh TLTRO has become more likely in our view, as the ECB seeks to keep financial conditions from tightening. However, recent commentary from the ECB suggests that an announcement may take some time to materialise.”
“As such, a June decision on TLTRO looks more likely now than a March announcement.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.