A further rate cut would be catastrophic, especially for German banks.
Goldman estimates that 20bps cut (effectively what mkt has priced in betw now
and Sep), would trigger aggregate losses in 32 banks they cover of €5.6bn,
about a 6% cut to profits
German recession
gauge raises the alarm bell: 3mth/5y Bund spread turned neg for first time
since GFC. The last time the 3mth to 5y Bund spread inverted was Aug2008 on the
eve of Lehman Brothers collapsing
Yields negative out to 21 yrs
10 y Greek debt yields less than US 10 y Treasuries
ECB interest rate should be around 3,8% instead of ZERO at least according to Taylor rule
via @shuldensuehner
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