Tuesday, 25 September 2018

The ECB fine-tunes its QE toolbox... just in case

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Includes debt which some would classify as “corporate”.

In an unexpected move today the ECB has added additional names to its agency buying programme.

The majority of the new names are very different from those on the existing list by:

1) jumping from pure agency names to instead include credits that some would class as corporate, and

2) having a noticeable slant towards issuers from the peripheral countries of Italy, Spain and Portugal.

While the expanded list maintains the overall bias toward buying high quality investment grade paper, there is a clear shift to lower-quality credits. The announcement was a surprise as the ECB had next been expected to expand the list to include bonds of other government-owned entities.

The ECB seems to be fine-tuning its toolbox ahead of the Greek referendum this Sunday (July 5), the outcome of which remains very uncertain.

The changes today would help the ECB frontload or even expand its QE programme should the market impact of Greece, while currently limited/contained, become more contagious.

The ECB now includes the following additional credits:

  • Työttömyysvakuutusrahasto (TVR)
  • ÖBB-Infrastruktur AG
  • Autobahnen- und Schnellstraßen-Finanzierungs-AG (ASFINAG)
  • Infraestruturas de Portugal S.A. (IP)
  • ENMC - Entidade Nacional para o Mercado de Combustíveis E.P.E
  • Ferrovie dello Stato Italiane S.p.A.
  • Terna S.p.A. - Rete Elettrica Nazionale
  • ENEL S.p.A.
  • SNAM S.p.A.
  • Administrador de Infraestructuras Ferroviarias - Alta Velocidad (Adif AV)
  • SNCF Réseau
  • Caisse Nationale des Autoroutes (CNA)
  • DARS d.d.
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