Draghi Q&A: Decision wasn’t unanimous

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.

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