You know it’s been a dull press conference when the only real talking point to come from it is a protestor jumping on the table in front of Mario Draghi, throwing confetti on him while yelling “end ECB dictatorship”. That was very much the case today though as Draghi delivered the usual statement, highlighting the few improvements in the euro area before noting some future risks and stressing the need for member states to continue implementing structural reforms.
The only notable point to come from the press conference was Draghi’s repeated insistence on the “full implementation” of QE stating that purchases are “intended” to run until the end of September 2016. In other words, if inflation picks up faster than the ECB is anticipating, it will taper its asset purchases, and if slower, it will go beyond. Draghi also referenced the ELA program and stated that currently Greece is the largest beneficiary of it as a percentage of its GDP, with it currently receiving €110 billion.
All things considered, as expected, today was something of a non-event from the ECB. The euro hovered around 1.06 against the dollar for most of the press conference and only broke higher after the release of weak US data. This had to be expected when you consider that it only started purchasing government debt last month and there would therefore be very little evidence of its effectiveness so far. For something to change, circumstances would have had to change dramatically which has not been the case.
The only notable point to come from the press conference was Draghi’s repeated insistence on the “full implementation” of QE stating that purchases are “intended” to run until the end of September 2016. In other words, if inflation picks up faster than the ECB is anticipating, it will taper its asset purchases, and if slower, it will go beyond. Draghi also referenced the ELA program and stated that currently Greece is the largest beneficiary of it as a percentage of its GDP, with it currently receiving €110 billion.
All things considered, as expected, today was something of a non-event from the ECB. The euro hovered around 1.06 against the dollar for most of the press conference and only broke higher after the release of weak US data. This had to be expected when you consider that it only started purchasing government debt last month and there would therefore be very little evidence of its effectiveness so far. For something to change, circumstances would have had to change dramatically which has not been the case.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0700 as focus shifts to Fed policy decisions
EUR/USD stays in its daily range below 1.0700 following the mixed macroeconomic data releases from the US. Private sector rose more than expected in April, while the ISM Manufacturing PMI fell below 50. Fed will announce monetary policy decisions next.
GBP/USD holds steady below 1.2500 ahead of Fed
GBP/USD is off the lows but stays flatlined below 1.2500 on Wednesday. The US Dollar stays resilient against its rivals despite mixed data releases and doesn't allow the pair to stage a rebound ahead of the Fed's policy decisions.
Gold rebounds above $2,300 after US data, eyes on Fed policy decision
Gold gained traction and recovered above $2,300 in the American session on Wednesday. The benchmark 10-year US Treasury bond yield turned negative on the day after US data, helping XAU/USD push higher ahead of Fed policy announcements.
A new stage of Bitcoin's decline
Bitcoin's closing price on Tuesday became the lowest since late February, confirming the downward trend and falling under March and April support and the psychologically important round level.
US Federal Reserve Decision Preview: Markets look for clues about interest rate cut timing
The Federal Reserve is widely anticipated to keep interest rates unchanged. Fed Chairman Powell’s remarks could provide important clues about the timing of the policy pivot.