{"id":3021,"date":"2010-06-30T13:22:37","date_gmt":"2010-06-30T13:22:37","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=3021"},"modified":"2025-03-27T15:49:04","modified_gmt":"2025-03-27T15:49:04","slug":"low-ecb-loan-take-up-to-cut-euroland-monetary-base","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=3021","title":{"rendered":"Low ECB loan take-up to cut Euroland monetary base"},"content":{"rendered":"<p>Markets were relieved that banks bid for &#8220;only&#8221; &euro;132 billion at the ECB&#8217;s latest three-month refinancing operation today, suggesting that funding pressures are less acute than feared (although that conclusion is provisional pending the results of tomorrow&#8217;s special six-day operation).<\/p>\n<p>A corollary, however, of the low take-up is that the monetary base (i.e. currency plus banks&#8217; current account and deposit facility reserves) is likely to fall significantly when the ECB&#8217;s &euro;442 billion 12-month facility matures tomorrow. The magnitude of the decline will depend on the six-day operation, among other factors, but could be as much as &euro;250 billion &ndash; equivalent to 19% of the monetary base as of the end of last week.<\/p>\n<p>Such a decline would probably put upward pressure on market interest rates &ndash; see chart &ndash; and would be a further reason for caution about near-term equity market prospects, given the recent strong correlation between the monetary base and stocks in the US discussed in several prior posts.<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/euroland-300610.gif?__SQUARESPACE_CACHEVERSION=1277906926846\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Markets were relieved that banks bid for &#8220;only&#8221; &euro;132 billion at the ECB&#8217;s latest three-month refinancing operation today, suggesting that funding pressures are less acute than feared (although that conclusion is provisional pending the results of tomorrow&#8217;s special six-day operation). A corollary, however, of the low take-up is that the monetary base (i.e. currency plus [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3021","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3021","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3021"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3021\/revisions"}],"predecessor-version":[{"id":5330,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3021\/revisions\/5330"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3021"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3021"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3021"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}