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ECB QEs: €60 billion / month, over €1 trillion

The extremely highly anticipated decision by the ECB on QE is now behind us, and Draghi certainly delivered:. a program to buy 60 billion euros per month intended to end in September 2016. 20% risk sharing: 12% is agencies like the EIB. The program could last for a longer period. Draghi does not care about risk sharing and there was a broad agreement on the main points.

And there is lots more. Here is  a live blog of the event as it happened:


  • 60 billion per month up to end 2016 to begin in March
  • Total: over 1 trillion – Draghi confirms
  • Buying will be made by the National Central Banks but coordinated by the ECB.
  • Commitment to continue QE until inflation gets back to comfortable levels.
  • Bond yields falling
  • ECB will also buy bonds with negative yields.
  • Easing TLTRO conditions.
  • Impact on  foreign exchange will be watched.
  • 33% limit on issuer and 25% issued – very generous
  • Various degrees of agreements on the moves – basically broad based support
  • EUR/USD falls to a low of 1.1509 but does not  collapse. Update: it now falls heavily.
  • Analysis:  5 points on why Draghi more than delivered and EUR/USD has lots more room to fall

Live Blog

  • 13:00 GMT Press conference begins at 13:00. All times are GMT.
  • 13:01 EUR/USD dipped on the initial statement but rebounded back to around 1.1630.
  • 13:02 The strongest possible move would be a QE3 style program: buying bonds on a monthly basis without a time limit.
  • 13:04 There were talks of the program ending after one year or at end 2016.
  • 13:06 The low for EUR/USD was 1.1460 on Friday, but the pair bounced back quite quickly.
  • 13:07 One important detail is if the program is managed by the ECB or allocated to the national banks.
  • 13:07 The number of dissents is also important.
  • 13:09 You can watch the press conference here.
  • 13:10 The event takes place in the new headquarters of the ECB for the second time in a row.
  • 13:11 The question remains: how much is priced in? But the answer is complicated as it depends on quite a few factors.
  • 13:13 Reportedly, Draghi briefed Merkel on the plans.
  • 13:15 Support appears at 1.16, followed by 1.1560 and 1.15.
  • 13:17 Resistance appears at the launch rate of 1.17, followed by 11.1867.
  • 13:19 The move also has implications on other currencies.
  • 13:21 Some brokers have limited leverage or spreads towards the ECB decision, after being affected by the SNB decision.
  • 13:23 We could initially see a move to one direction before the pair reverses and goes to the other direction. This is the nature of such big events.
  • 13:25 At the same time, the US releases jobless claims. These are  overshadowed by Draghi.
  • 13:26 EUR/USD is ticking lower towards teh presser, getting closer to 1.16.
  • 13:27 Draghi worked hard to get the Germans to agree to bigger moves.
  • 13:28 The reporters are getting ready for the event…
  • 13:30 US jobless claims 307K.
  • 13:31 Draghi still awaited…
  • 13:32 The euro remains pressured as Draghi is still behind the scenes…
  • 13:34 Draghi is often late, but not this much.
  • 13:38 Finally  – Press conference begins
  • 13:39 Welcoming Lithuania as the 19th euro country.
  • 13:40 Draghi talks about the rotation system.
  • 13:41 EUR/USD is going down.
  • 13:42 Expanded asset purchase program enhancing current program.
  • 13:42 Combined monthly purchased move of 60 billion per month up to September 2016.
  • 13:42 EUR/USD  falls
  • 13:43 The ECB will manage the program.
  • 13:44  Purchases made by the NCBs.
  • 13:44 ECB to hold 8% of additional asset purchases.
  • 13:45 20% risk sharing
  • 13:45 Risk increased for prices
  • 13:46 Prices continue to be subdued.
  • 13:46 MEasures taken so far have improved the situation, but where not enough.
  • 13:47 EUR/USD now recovers above 1.1560.
  • 13:48 Today’s measures will underpin the anchoring of inflation expectations.
  • 13:48 Financing conditions will continue to improve.
  • 13:49 Risks remain on the downside.
  • 13:50 EUR/USD low point 1.1509 so far.
  • 13:51 M3 is on the rise.
  • 13:52  Loans to non financial corporations remain weak but recovering
  • 13:53 Indications of further net easing.
  • 13:54 With all the signals, there was a need for further monetary  accommodation.
  • 13:55 We are striving to reach our target.
  • 13:55 Governments should do more.
  • 13:55 Questions begin
  • 13:57 We will buy government debt up to a level that will allow proper price formation: up to 33%  percent and issue limit of 25%.
  • 13:58 Generous limits.
  • 13:59 The decentralization is not so important, says Draghi.
  • 14:00 Draghi goes on to explain the  mechanisms of risk sharing.
  • 14:02 The Governing Council is the sole decision maker.
  • 14:03 EUR/USD resumes falls.
  • 14:03 The program is very large.
  • 14:03 We needed to mitigate the concern that many  countries had (Germany?)
  • 14:04 OMT is waiting and under full risk sharing.
  • 14:05 Question about unintended consequences and why will QE work?
  • 14:06 We are not in a one country setup.
  • 14:06 Do we want to abandon the principle of full risk sharing? Absolutely not.
  • 14:07 We  believe that the measures taken today will lift inflation.
  • 14:08 Monetary policy can create the basis for growth but not do  everything.
  • 14:10 EUR/USD loses 1.15, EUR/GBP is at a new  multi-year low.
  • 14:11  Meeting was unanimous in stating that the asset purchase program was a true monetary policy tool
  • 14:12 LArge majority on the need to trigger it now. So large that a vote was not needed
  • 14:12 Consensus on risk sharing at 20%
  • 14:13 The 1 trillion plus levels are generally correct
  • 14:13 EUR/USD new low at 1.1477
  • 14:14 Mistake to see QE as fiscal expansion
  • 14:15  programme designed to avoid any monetary financing
  • 14:16 EUR/UDS digs lower: 1.1460 is critical support.
  • 14:17  first thing drawn upon will be buffers of NCBs, by and large they all have adequate buffers
  • 14:18  MATURITIES RANGE BETWEEN 2 AND 30 YEARS – Draghi “It’s pretty long”
  • 14:18 EUR/USD new low at 1.1465
  • 14:19  Discussion of risk sharing “quite futile”
  • 14:20  ECB will also buy bonds with negative yields
  • 14:21 No special rule for Greece
  • 14:22 EUR/USD still supported at 1.1460.
  • 14:24 Reading of reality differ.
  • 14:25 Falling oil prices can cause temporary inflation
  • 14:26 We don’t see bubbles
  • 14:27 We are distant from the 2% or a bit below target.
  • 14:28 EUR/USD holds at 1.1464.
  • 14:29 Our measures will contribute to lifting expectations.
  • 14:30 Some of the effects have been already priced in the markets.
  • 14:30 Difference between expectations and actions.
  • 14:30  We are showing that credibility is deserved with today’s actions
  • 14:31  Risk sharing was not a fundamental aspect, repeats Draghi
  • 14:32 The program is big and so broad based resulted in this solution
  • 14:32 Compromise was needed to mitigate concerns.
  • 14:32 Consensus means agreement or lack of objection.
  • 14:33  The monthly flows are quite meaningful as is the overall amount
  • 14:34 Draghi rejects the danger of hyperinflation and hits back.
  • 14:35 Question about stopping the program if inflation.
  • 14:36 Intended to be carried out until September 2016 and will be carried out until sustained inflation expectations change.
  • 14:38 The exchange rate is not a target. He repeats the mantra.
  • 14:39 EUR/USD recovers to 1.15.
  • 14:41  Each word was carefully chosen, concludes Draghi
  • 14:41 Press conference ends


In the previous ECB decision in early December, ECB president Mario Draghi  said that further measures will be considered in early 2015. Since then, the prices of oil continued falling and Europe entered official  deflation: a fall of 0.2% in headline CPI.

The stakes have risen with the shocking decision by the SNB: the Swiss central bank removed the 1.20 floor under EUR/CHF and clearly hinted that the ECB is about to do something big.

Yesterday we had a leak about €50 billion euros per month but with an unclear timeframe. Earlier, there were reports of a limit of up to 25% of national  debt, something that could surpass  2 trillion in total.

The size maters as some euro printing is already priced in. A bigger size means a bigger weight on the euro.

 Draghi Day – all the articles towards the expected QE decision

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.