November ECB Presser: No Surprises

Takeaway: OMTs still on hold; nothing new from Draghi

Positions in Europe: Long German Bonds (BUNL)

 

After ECB President Mario Draghi made his big central bank splash in September by introducing the Outright Monetary Transactions (OMTs) program to buy “unlimited” sovereign bonds of Eurozone members at the Bank’s discretion, little has been indicated about its use. And today’s conference provided no further color. 

 

There were no major changes to the economic outlook versus the October meeting. In December, the Bank will release new economic projections. Here we think GDP, in particular, will be revised lower, in step with the European Commission’s autumn Eurozone growth projections released yesterday: -0.4% in 2012; -0.1% in 2013; and +1.4% in 2014.

 

You can find Draghi’s Introductory Statements to the press conference related to inflation, growth and monetary outlook here.

 

The ECB governing council decided that the interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.75%, 1.50% and 0.00% respectively.

 

November ECB Presser: No Surprises - 22. rates

 

The Q&A was filled with questions on if and when Spain should ask for a bailout and how the OMTs could be coordinated with such an announcement. Draghi was once again tight lipped on both fronts, saying that it’s up to the individual Eurozone governments to request a bailout and that the Bank stands ready to use OMTs (of course under conditional requirements).

 

Overall, Draghi once again demonstrated a comfortable position with the sheer announcement of the OMTs program to reduce risk across the region. While peripheral yields have come in over recent weeks versus summer highs, we still see broader risks from the sovereigns and banks of Spain, Italy and France and view the weak credit lines to households and corporations as evidence of a very clogged credit environment that should prolong a return to real growth.

 

November ECB Presser: No Surprises - 22. loans

 

Matthew Hedrick

Senior Analyst


Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more