The European Central Bank was expected to leave its policy unchanged. The interest rate is predicted to remain at 0%, the deposit rate at -0.40% and the QE program at €80 billion / month. And indeed, we did not receive any policy change. Perhaps the action will come in the press conference.
In the press conference, Mario Draghi does not provide any big news. He tells us that in December, they will have new forecasts, extending to 2019 and then perhaps we will get news about the next steps.
Draghi clarifies that tapering of QE was not discussed: EUR/USD slides back after a blip to the upside. Draghi also says that low rates work and mentions various liquidity achievements.
The bottom line is that we will get more news in December, but beginning to end the QE program in March seems unlikely.
Draghi adds that he does not see any scarcity in bond buying. This implies that they can easily extend the QE program beyond March 2017.
EUR/USD looks heavy above 1.0950.
This reaction goes hand in hand with our preview: ECB Preview: no news is good news for Draghi, bad news for the euro [Video]
Here is the chart:
In terms of his assessment of the current situation, there is no news. An accommodative policy is necessary, despite some moderate improvements.
The current program ends in March 2017. The speculation is about the future about this bond-buying scheme. If the ECB takes the tapering path, the euro could rise. This scenario looks unlikely at the moment. There are higher chances that the ECB extends the current program beyond the current end date.
EUR/USD is stuck under 1.10, with resistance at 1.1120 and support at 1.0910.
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