Commerzbank Flag Focus On Today’s MRO Operations

Commerzbank suggest that the “allotment in the ECB's MRO will get more attention than usual. The operation will settle tomorrow, the day when more than €500bn of TLTRO borrowing needs to be repaid. Recent participation has usually been in the range of €1-2bn, the average over the last three years was below €1bn.”

• “The cost of the funding and the potential stigma will probably play a role in the decision by banks to participate. What's more, the participation and potential impact on short-term rates could hold important lessons for the ECB's review of the operational framework, which it wants to complete by year-end. So far there has been no noticeable upward pressure on Italian repo rates.”