Vespasianus
Princeps thermarum
Reuters ieri, sulla scarsità di tds portoghesi per la Bce.
ECB bond-buying appears to be losing its potency in Portugal just when the country most needs the backstop it provides.
Portugal's economic growth is lacklustre, its banking sector weak and its coalition government at odds with Brussels over the budget deficit. To top it all, jittery markets are counting down to a vital ratings review on Oct. 21.
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ECB asset purchases, which have topped the 1 trillion euro mark, help contain volatility at times of heightened risk aversion and uncertainty -- for instance in the days after June's shock decision in Britain to leave the European Union.
But the central bank has been buying fewer bonds in Portugal than its rules allow because it faces a scarcity of eligible securities, in effect reducing the impact of its purchases.
While the ECB also faces a scarcity of eligible bonds in countries such as Ireland, Finland and Germany, Portugal is especially vulnerable, analysts say.
"The QE safety net is becoming thinner for Portugal," said Richard McGuire, head of rates strategy at Rabobank. "Slow growth, a less than efficient governing arrangement and the looming DBRS review are challenging sentiment at the very juncture that the alternative demand that might have been present via QE is ebbing."
ECB bond-buying ebbs in Portugal when Lisbon needs it most
ECB bond-buying appears to be losing its potency in Portugal just when the country most needs the backstop it provides.
Portugal's economic growth is lacklustre, its banking sector weak and its coalition government at odds with Brussels over the budget deficit. To top it all, jittery markets are counting down to a vital ratings review on Oct. 21.
...
ECB asset purchases, which have topped the 1 trillion euro mark, help contain volatility at times of heightened risk aversion and uncertainty -- for instance in the days after June's shock decision in Britain to leave the European Union.
But the central bank has been buying fewer bonds in Portugal than its rules allow because it faces a scarcity of eligible securities, in effect reducing the impact of its purchases.
While the ECB also faces a scarcity of eligible bonds in countries such as Ireland, Finland and Germany, Portugal is especially vulnerable, analysts say.
"The QE safety net is becoming thinner for Portugal," said Richard McGuire, head of rates strategy at Rabobank. "Slow growth, a less than efficient governing arrangement and the looming DBRS review are challenging sentiment at the very juncture that the alternative demand that might have been present via QE is ebbing."
ECB bond-buying ebbs in Portugal when Lisbon needs it most
