/TLTROs: (1/2) Sell-side views for today's......>

ECB: /TLTROs: (1/2) Sell-side views for today's TLTRO III.4 takeup (annc.

1030BST/1130CET) vary widely. The baseline view is probably set by none other

than the ECB themselves, with Exec Board member Schnabel saying last week that

takeup could be on the order of EUR1.4trn, given surveys.

- Schnabel's EUR1.4trn appears to be higher than most sell-side analysts had

expected, and appears to have recalibrated consensus upward.

- Note the EUR1.4trn figure refers to gross takeup - the net figure will

subtract the ~EUR760bln in repayments from earlier TLTROs etc.

- Reminder, this TLTRO matures in Jun-23, and until Jun-21 the funding cost can

be as low as -1% depending on meeting lending conditions. Generally speaking, a

higher takeup vs consensus should be considered positive.

- Per Unicredit, 
indicate reluctance by banks to increase their liquidity"; EUR 900-1,200bn (as
they expect) broadly in line with market expectations; >EUR 1,200bn likely
positive for sentiment/short-term rates, particularly in BTP curve.
- We won't get details on allocations until next month.