Archive - Dec 4, 2014

While the ECB's announcement is due out in minutes, the only thing the market is looking forward to is Draghi's actual press conference due to take place in just over an hour. It is here that the former Italian and Goldman banker is expected to take jawboning to new levels, even if - as is customary - he actually does nothing and considering the ECB's balance sheet, which after all its private covered bond and ABS QE is growing at the "torrid" pace of some €4 billion per week, not even enough to offset the natural decline in the ECB's balance sheet, his actions so far have achieved absolutely nothing the algos are starting to get impatient.

• Thanks Fed: Meet the high schooler who made $300K trading penny stocks under his desk (Verge)
• Protesters block NY streets after officer cleared in chokehold death (Reuters)
• U.S. Plans Probe of New York Police Chokehold Death (BBG)
• Sharpton Leads Civil-Rights Meeting on Chokehold Decision (BBG)
• Staten Island on Edge Over Grand Jury Decision In Death of Eric Garner (WSJ)
• Draghi Tests Speed Limit as ECB Awaits Stimulus Evidence (BBG)
• European Stocks Approach Seven-Year High Before Draghi Statement (BBG)
• Britain targets multinationals that try to dodge taxes (Reuters)
• Oil Trains Hide in Plain Sight (WSJ)

Today we'll learn more about whether Mr Draghi becomes Super Mario in the near future as the widely anticipated ECB meeting is now only a few hours away. We will do another summary preview of market expectations shortly, but in a nutshell, nobody really expects Draghi to announce anything today although the jawboning is expected to reach unseen levels. The reason is that Germany is still staunchly against outright public QE, and Draghi probably wants to avoid and outright legal confrontation. As DB notes, assuming no new policy moves, the success of today's meeting will probably depend on the degree to which Draghi indicates the need for more action soon and the degree to which that feeling is unanimous within the council. Over the past weekend Weidmann's comment about falling oil prices representing a form of stimulus highlights that this consensus is still proving difficult to build. It might need a couple more months of low growth and inflation, revised staff forecasts and a stubbornly slow balance sheet accumulation to cement action.