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LTRO dismal participation - BBH

FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman focussed on the EZ and noted that participation in the ECB's Targeted Long-Term Repo Operation was dismal.

Key Quotes

"The take down was 82.6 bln euros."

"This is a little less than half of median expectations. This stopped the euro as it poked through $1.29, as it had been recovering from the post-FOMC slide that bottomed in early Asia near $1.2835."

"European bonds initially sold off, perhaps on ideas that low participation means less new fuel for carry trades. However, they recovered, perhaps on anticipation of additional policy response."

"Some banks began acknowledging participation. Those banks that have not paid back as much of the LTRO funds are thought to be the most likely candidates to participate in the TLTRO, and this means Italian and French banks."

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