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ECB
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.
MNI London Bureau | +44 203-865-3807 | tim.cooper@marketnews.com
MNI London Bureau | +44 203-865-3807 | tim.cooper@marketnews.com

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