EURUSD is at 8 month highs, having broken above 1.36 for the first time since Feb 4th. This is a 100 pip ramp from the start of Draghi's press conference as he offered little or no hope for imminent policy actions to weaken what has already become an earnings-impacting strength in the region's currency. Whether this knee-jerk is algo-driven reaction to "no news is good news" or market participants actually pressing the EUR higher on a lack of policy action in order to force Draghi's liquidity-providing hand down the line is unknown, but for now, we await the Q3 earnings data from European entities to see if they justify the near-record high stock prices being atrtributed.
In summary:
- Credit flows are weak - but that's a lagging factor apparently
- Fragmentation remains - but banking resolution will fix that
- EUR is high - we don't comment on FX
- LTRO - maybe if needed
- Countries need to reform quickly and ignore the exuberance in the markets as any indicator of no need to reform
- "weak fragile recovery"
- no inflation
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