Draghi answering questions
- There were different views about whether we should have announced an end date
- The ‘large majority’ of members preferred to keep bond buys open ended
- Eurozone needs ‘ample’ stimulus rather than ‘substantial’
- Haven’t discussed sequencing of hikes vs ending reinvestment
- QE is not going to stop suddenly
- Don’t yet see encouraging signs in wage growth and underlying inflation
- Reduction in monthly purchases is not tapering, it’s just a downsize
The ‘sudden stop’ answer was in regards to a question about whether they could go from 30B per month to zero. That’s dovish.
In addition, the negative response to wage growth and inflation is also euro-negative and EUR/USD is back down to 1.1750.
That’s it for this month. Not much in terms of market movements.