ECB Minutes show Dovish Draghi is in full control - 3 takes

The European Central Bank released its Meeting Minutes from the June 14th meeting that sent the Euro tumbling down. The ECB announced the tapering down and end of QE but also announced a pledge to keep interest rates at current levels "through the summer of 2019". ECB President Mario Draghi was very dovish back then. And the accounts from that meeting are not helpful for the Euro either. 

Here are three vital dovish points from the document: 

1) Uncertainty: "Given the uncertainty, it is prudent to leave the end of QE conditional on incoming data." This is not news but still serves as a reminder that the ECB is fundamentally dovish, sees the glass half empty. The word "uncertainty" can be easily be replaced with "concern". 

2) Interest rate pledge open-ended: This is something the minutes wanted to emphasize. This is a reminder that the summer and the autumn of 2019 are still far away and the ECB can keep rates lower for longer. Moreover, there is no clarification about what "through the summer of 2019" means, not responding to recent reports about some hawks wanting to raise rates earlier. The odds of a rate hike have risen on those reports, and may now fall.

3) Unanimous: The minutes state that policymakers were in unanimous support of policy proposals. It is hard to believe that Bundesbank President Jens Weidmann was indeed behind the pledge to maintain low rates. Do the minutes refer only to the decision to reduce QE in October and then to end QE by the end of the year? As in the previous case, this phrase is open to interpretation and leaves more questions than answers. Nevertheless, even if not everybody was behind everything, Draghi still has control over the wording of the minutes, sending a dovish message here as well.

The reaction to the minutes is muted, but it still weakens the EUR/USD when it faces the next challenges. 

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