All eyes were on the ECB. So far. EUR/USD ticks a bit up but isn’t going anywhere fast. It then slides back down to 1.1080 and rises all the way to 1.1180.
Here are some highlights:
- Draghi begins his conference by some patting on the back.
- QE reaching the real economy.
- QE to run until September 2016, but could be adjusted according to plan
- Sluggish pace in implementing structural reforms
- Growth forecasts unchanged.
- The inflation forecast for 2015 has been raised to 0.3%. It was left unchanged at 1.5% and 1.8% for 2016 and 2017 respectively. This is a minor upgrade and EUR/USD feels it
- Full implementation of QE needed – this is the usual dovish message.
Questions
- Asked about Greece, Draghi dodges.
- In the meantime, there are some reports about Greece backing down on some pension reforms.
- Says that the Coeure text release was a mistake and that the ECB is reviewing release rules.
- The recent rise in inflation was not a surprise for us.
- We are still from an exit and not talking about an exit strategy.
- Still a long way to go on inflation.
- We will assess the quality of Greek debt, assess the evolution.
- If needed, we will add QE, currently no reason to do so.
- We monitor risks to the financial sector.
- Potential stock market bubbles will not be addressed by monetary policy.
- All our energies should be focused on a strong agreement with Greece. Everything else will follow.
- Expects a full payment of Greek bonds that are held by the ECB via the SMP program.
- EUR/USD is now rising to 1.1180 and it’s hard to connect the recent rise to anything Draghi said.
- Draghi repeats the inflation forecasts. Oil prices should not continue to decline.
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