Euro Tumbles; Stocks, Futures Surge After Draghi Says ECB "Will Reconsider Policy Stance In March"

Tyler Durden's picture

Back in September, Draghi set the stage for the unleashing of an imminent QE bazooka, something the market was fully convinced would take place on December 3, pushing the EUR lower by nearly 10 big figures and pushing European stocks to nosebleed levels. When it didn't, and when Draghi unveiled a water pistol instead, the EUR soared by a near record amount, and Euro assets crashed.

Fast forward to today, when as we previewed earlier today, nobody was expecting much if anything from Draghi, to wit:

[DB] concludes that "the ECB will be reactive in addressing the risks to its inflation mandate and will wait for more visibility on the three key fronts." In other words, nothing, which of course may be just the "reverse psychology" moment Draghi needs to actually surprise markets: if his massive build up was so disappointing last month, why not do the reverse today?

He did precisely that, when moments ago during the ECB press conference Draghi pulled a page straight from the September presser when he said that as a result of an "increase in downside risks" and a "significantly lower inflation outlook than in early December", the ECB "will need to review" its monetary policy stance in March, blaming tumbling oil prices for the collapse in inflation expectations, and suggesting that the QE expansion which was supposed to take place in December, but didn't, will now most likely take place in March.

Of course, the ECB's inflation expectations hockeystick was visible to anyone who looked for more than 2 seconds as the central bank's inflationary forecasts...

... which were based on $52 oil at the end of 2016, so only algos could be surprised that the ECB is far, far behind the curve.

And yet surprised they were, because just as Draghi once again started jawboning and hinting that the ECB is back to unveiling some bazooka which doesn't really exist, the EUR crashed...


... sending the DAX and other European equity indexes surging...

... also pushing US equity back to their overnight highs.

And so the bogey has been set, with expectations once again rampant that the ECB will do much more in two months.

Will it actually do that, or will everyone be crushed like they were back in December? It may depend on oil, where if the steep decline continues, this time Draghi may have no choice but to actually follow through with his threats.

As for the market reaction, keep a close eye on the duration of the risk bounce: if risk refuses to push higher from here, or worse - tumbles - the market will have clearly given its verdict on all current and future Draghi jawboning and called the ECB's bluff: no more words, actions are now demanded.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
LawsofPhysics's picture

More jawboing, nothing more. We all knew this was coming.

The half life of this jawboning will be a few hours.  Time to sell a couple things...


philipat's picture

"Initial Jobless Claims rise to 6-Month Highs"

"Philly Fed contracts for 5th month in a row as "Hope" crashes to a 3-year low"

So, naturally:

"Stocks, Futures surge, Euro tumbles after Draghi says ECB will reconsider policy stance in March"

What a fucking joke this has all become......





Xibalba's picture

Shelf life of the interventions is  now about 5 minutes 

spastic_colon's picture

lets hope so..........its no wonder yesterdays action coupled with the timing of draghi and yellen next week; gotta keep the dream alive and rally into speeches.


probably one of those days that start weak and end strong..........just cuz

Mr.Sono's picture

Weapon of choice "WORDS" good luck with that Mario.

The Merovingian's picture

AKA ... the whimpy approach ... I will gladly pay you Tuesday for a hamburger today. The problem is the Sheeple only have average attention spans of about 20 seconds, so good luck stringing this out until March Draghi.

holgerdanske's picture

Draghi is an idiot, trying the same mass destruction tactic that hasen't worked before. We are surrounded by false profets with an agenda that is not acceptable and it is time we just let them play their game.


Buy gold, you will need it!

NubianSundance's picture

What sort of 'market' is it which only works when CBs flood it with taxpayers money? 

Monetas's picture
Monetas (not verified) NubianSundance Jan 21, 2016 9:07 AM

Clever socialists .... fine tuning .... Capitalism's inate deficiencies .... with socialist remedy ?

goldsansstandard's picture

It's not just taxpayers money, everybody's money gets diluted. Hurts poor people most,as going from filet mignonette to sirloin is less painful than going from tuna to cat food.

philipat's picture

Um, it isn't taxpayers money, it's digital unicorn money....

rwe2late's picture

 unicorn money that the general public is obliged to accept and use

piliage's picture

What I'm wondering is where will this new savior ECB QE fire-hose liquidity go?

  • It's been going to oil, now that is in such a glut the market is cheaper than milk
  • It was going into Chinese infrastructure, but that too is now collapsing due to over-capitalization
  • It funded luxury property in New York, London, and Hong Kong, but now we're seeing softness and dropping prices in the upper end of property
  • Share buybacks only work when you've got enough profit to fund the debt, most companies will start hording cash given the woeful results in Q4 of 15
  • Emerging markets were a hot asset class for hedge funds, those have been crushed in the last 4 months as the bubble burst

What assets are left that these bastards haven't poisoned with previous QE? Will I finally start getting my 100k helicopter drop of hard cold Euro cash for 0%? Great! I need a new roof and to replace my 20 year old fuel oil furnace.


Kaiser Sousa's picture

u dont say??????


firstdivision's picture

Soooo...sell'em if you got'em

moonmac's picture

Stimulus is wonderful until it ends. #GreatDepression2

overmedicatedundersexed's picture

Davos is in meetings this AM..dirty tricks(deeds) are to be expected.. the theme of Davos this year,,,yellen has a ball gag bondage show tonight.

Bill of Rights's picture

( Visual ) I just threw up in my mouth...

Mark Mywords's picture
Mark Mywords (not verified) Jan 21, 2016 9:08 AM

Pull...this finger.

Bill of Rights's picture

Silver is back below $14 so were good to go, all is fine now...

FreeNewEnergy's picture

And, like clockwork, silver gets slammed.

The Crime of '73 looks like child's play to the manipulators of today, executing the slaughter of the mid-10s.

Fuckers, really. Nigga, please.

Kaiser Sousa's picture

who could have seen that coming????


khakuda's picture

When you get to the point of announcing more QE at every meeting when you are already doing large amounts of QE and have negative rates in many places, it is only a matter of time before the market figures out that the game is over and the long postponed reset begins.

Budd aka Sidewinder's picture

Next 2 days are critical...Friday gonna be good

Seasmoke's picture

I heard this so many times since 2011. My advice. Don't hold your breath. I'm sure it's just another Thursday and Friday. 

adr's picture

In the real world business is dead. Things have just absolutely stopped. Without stock markets gains to inject back into business operations, there isn't anything left.

There are almost no orders for anything. Nothing is shipping.

Bank_sters's picture

I laugh at those who believe westerners live in a representative democracy when hideous central banks literally create infinite dollars to control every meaningful aspect of our governments.

spastic_colon's picture

if you take a left out of your driveway they're easterners.

Farmer Joe in Brooklyn's picture

....except it's not funny....

Personally, I find it exasperating nearly to the point of depression.  I'm prepared and that's all that matters, I guess.

Seasmoke's picture

Why would they ever have to take actions, when their meaningless words does it all for them.  Time for a new edition of The Boy Who Cried Wolf. Burn the old copy. It's no longer relevant. 

thunderchief's picture

These Markets can be summed up in a few simple words.

Extreme desparation for fed intervention,  zero fundamentals,  panic in both directions,  connected money exiting in the confusion, manipulation,  rigging, politics,  and of course the main theme of the past 7 years brought to you by the potus himself. ..Hopium 

spastic_colon's picture

"These Markets can be summed up in a few simple words."


you could have stopped there......

Insurrexion's picture



Draghi was also quoted as saying in Italian after the mic was supposed to be turned off,

"I can with almost absolute certainty, confirm that I, to the best of my knowledge, have never engaged in sexual relations with that dead penguin."

franzpick's picture

Dragh me with a spoon: Listening to his malicious, concocted drivel must be toxic, then more so hearing the follow-up media regurgitation. Volume will be off for hours.

Oh wait, INDU futures now negative and off 100, and Brent back toward $26 - the markets aren't listening either: those INDU-SPX-NAZ handles, 14k-1700-3900, still look just a -1% day or two away:

Able Ape's picture

Truth is the daughter of time; however, it appears time is having a VERY difficult labor...

Truth Eater's picture

We'll think about it in two months.  LOL... the bastards think about it every damned minute of their wasted lives.  The crack addicts scream for MOAR and they get an encouraging pat on the head like trained dogs and are told we'll think about it.


The demons were to get you hooked, not to save you.  Now that we have your souls, we give you no more.

Farmer Joe in Brooklyn's picture

When all else fails, march out a central banker with promises of rainbows and unicorns...

This bullshit is going to start seeing some seriously diminishing returns.

Sorry, Yellen, Fischer, Bullard, Dudley, Lockhart, and the rest of you twats...

adr's picture

When has this fuck done anything other than talk about doing something?

40 S&P points because this sack of shit opened his mouth.


This fucking sack of refuse needs to be stabbed repeatedly in his dick with an escargot fork. It is the only utensil small enough to hit it.

Rip van Wrinkle's picture

This c**t's got a dick????

FreeNewEnergy's picture

Corruption is why I stopped paying taxes in 1999. Figured 25-odd years (I was 46 at the time) of paying into and playing along with this corrupt, broken system was enough for me. Stopped working "jobs" and started doing my own thing. Haven't looked back and fucked the feds and the state at every turn.

Still working for me.

If they want to come and get me, shoot me, torture me, whatever, I say, bring it. But, I know they won't because they are disunited, disorganized, distracted by their own self-worth and in constant denial. The day Detroit's experience becomes universal shall be my day in the sun, for I will be proven to have been right all along. Not that it matters, but, fuck the government.

PapiBoboSeekusMulch's picture

@FreeNewEnergy ... right on, brother. Right on. Are we the only ones? 

Vlad the Inhaler's picture

Crude reserves rise, China market down, jobless rate up, but one central banker rat flaps his mouth and we're back in the green baby!

allamerican's picture

slick- couple months keep mrkts guessing what?

might work till all forget..


Eireann go Brach's picture

I am just shocked, shocked that these guys can still walk the sreets. 

newworldorder's picture

Especially when the ECB is using using German and French money, since it has none of its own. The sheeple are beyond stupid.

franzpick's picture

This latest Draggy can kick may be that of an explosive financial IED: What a blast: