HSBC's Major: Brexit Requires ECB Policy Response

The transcript discusses the challenges faced by Mario Draghi and the ECB, particularly in response to economic impacts from the UK. It explores the influence of ECB policies on peripheral spreads and bond markets, highlighting the special circumstances of ECB bond purchases. The discussion shifts to how stock markets are reacting to bond market signals, emphasizing the outlook for interest rates. Finally, it speculates on potential future actions by the ECB, including adjustments to the Bund curve and monetary policy implications.

What potential policy response is the ECB considering to address the economic impact from the UK?

• Increasing interest rates

• Reducing bond purchases

• Cutting the rate further

• Strengthening the euro

What is driving the Italian bond market according to the discussion?

• Inflation rates in the Eurozone

• Expectations around ECB's unconventional policy

• Global economic trends

• Direct economic data from Italy

How are stock markets being influenced according to the transcript?

• By the outlook for rates

• By the economic growth in the Eurozone

• By the political stability in Europe

• By the performance of the US dollar

What is the current deposit rate mentioned in the discussion?

• Positive 10 basis points

• Zero basis points

• Negative 40 basis points

• Negative 20 basis points

What adjustment might the ECB make to its bond-buying rules?

• Increase the deposit rate

• Prohibit buying below the deposit rate

• Allow buying below the deposit rate

• Decrease the bond purchase quantum