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ECB president Mario Draghi made some  strong statements: the ECB is ready to buy bonds and that Germany should  understand that the ECB has a pan-European mandate. He seems to “stick it” to the Germans.

These strong statements come from an interview that Draghi gave to the German paper Die Zeit on the day he is meeting with German Chancellor Angela Merkel and finance minister Wolfgang Schäuble in Berlin.

Update:  EUR/USD breaks below the double bottom on Draghi, OMT

Update:  OMT may be legal says EU court aide – green light for QE?

The head of the European Central Bank did acknowledge that there are  different views about how to meet the mandate, but insisted that his institution is unanimous in its determination to reach it.

He also brushed away the persistent rumors that he is set to quit the central bank and take the post of the president of Italy. The current president is set to retire very soon, and rumors have been swirling.

Also two of his colleagues supported QE:

  • Italian ECB member Visco said that they should counter deflation risk with “major asset purchases”.
  • Austrian ECB  member Nowotny said that it “makes sense for the ECB to act next week”.

There were reports of €500 billion QE program.  This is basically priced in by the markets, which have already sent the euro down.

A lack of an announcement would boost the euro while an open-ended QE3 style program would send the euro plunging down quite heavily. However, this is unlikely.

 

EUR/USD  dipped on the initial comments but is now awaiting the non-binding consultation of the European advocate regarding the legality of the OMT.

More:  3 reasons to sell EUR/USD targeting 1.10 – Deutsche Bank