ECB's Draghi Explains Why He Did Not Cut Rates - Live Press Conference

Tyler Durden's picture

Despite record unemployment, record loan delinquencies, and record low loan creation, Mario Draghi and his merry European men decided now was not the time to cut rates to "help" the real economy. Of course, with peripheral bond and stock markets exploding higher why would he - Europe's 'problems' are solved if the market is to be believed. Of course the ECB press conference will have its smattering of negative rate discussions, QE teases, and OMT confidence-inspiration but the multi-year highs in EUR will continue to hurt Europe's exporters means he'll have to try sometime to jawbone it down.

 

Draghi starts off on a less than cheerful, quite defaltionary, note:

  • DRAGHI: EURO AREA MAY FACE PROLONGED PERIOD OF LOW INFLATION
  • DRAGHI SAYS EURO AREA GROWTH RISKS REMAIN `ON THE DOWNSIDE
  • DRAGHI SAYS POLICY TO REMAIN ACCOMMODATIVE AS LONG AS NEEDED
  • DRAGHI SAYS UNDERLYING PRICE PRESSURES TO REMAIN SUBDUED
  • DRAGHI SAYS MONETARY, CREDIT DYNAMICS REMAIN SUBDUED
  • DRAGHI SAYS UNEMPLOYMENT REMAINS HIGH
  • DRAGHI SEES DOWNSIDE RISKS TO ECONOMIC OUTLOOK
  • DRAGHI SAYS BALANCE-SHEET ADJUSTMENTS WILL WEIGH ON ACTIVITY
  • DRAGHI: COMMODITY PRICES, SLOW REFORMS ALSO DOWNSIDE RISKS

The EURUSD, after it was sent higher before the conference by momentum ignition algos, did not like these statements:

And some more upbeat assessments:

  • DRAGHI SAYS POLICY STANCE TO SUPPORT GRADUAL ECONOMIC RECOVERY
  • DRAGHI SAYS INFLATION WILL RISE GRADUALLY THEREAFTER
  • DRAGHI SAYS HIGHER COMMODITY PRICES ARE UPSIDE INFLATION RISK
  • DRAGHI SAYS RISKS TO INFLATION BROADLY BALANCED
  • DRAGHI: INFLATION SEEN AROUND CURRENT LEVELS IN COMING MONTHS
  • DRAGHI SAYS LATEST INFLATION DATA BROADLY AS EXPECTED
  • DRAGHI SAYS REAL INCOMES BENEFIT FROM LOWER ENERGY PRICES
  • DRAGHI SAYS HIGHER COMMODITY PRICES ARE UPSIDE INFLATION RISK

Better have something good in the Q&A or else Draghi may rapidly become Trichet.