With a disappointingly slow asset accumulation in the ABS and Covered Bond purchase schemes, Draghi better "get back to work" soon or the market (EURUSD down 17 handles on nothing but promises) will lose its patience. As we noted earlier, Weidmann's hints suggest the oil-price-slowdown is providing cover for monetary policy and obscuring the 'bad' deflation. Crucially Draghi will need to stress the 'need' for action and the 'unanimity' of that decision to keep the algos buying...
Draghi is due to speak at 830ET...
Some of the headlines from Bloomberg:
- DRAGHI SAYS ASSET PURCHASES, TTLTROS TO HAVE SIZABLE IMPACT
- DRAGHI SAYS PURCHASES WILL LAST FOR AT LEAST TWO YEARS
- DRAGHI SAYS BALANCE SHEET SEEN MOVING TOWARD EARLY 2012 LEVELS
- DRAGHI SAYS MEASURES EASE POLICY STANCE, SUPPORT RATE GUIDANCE
- DRAGHI SAYS ECB UNANIMOUS IN COMMITMENT TO ACT AGAIN IF NEEDED
- DRAGHI SAYS LATEST DATA INDICATE LOWER INFLATION, GROWTH
But judging by the EURUSD reaction, this part of Draghi's remarks was not what was desired:
- DRAGHI SAYS ECB TO REASSESS CURRENT STIMULUS NEXT QUARTER
And then this:
- DRAGHI SAYS ECB OFFICIALS UNANIMOUS ON MORE STIMULUS IF NEEDED
Just not on the format.
And then the now traditional slashing of economic expectations:
- ECB SEES 2014 GDP GROWTH OF 0.8% VS. 0.9%
- ECB SEES 2015 GDP GROWTH OF 1% VS. 1.6%
- ECB SEES 2016 GDP GROWTH OF 1.5% VS. 1.9%
Any other day this alone would have been enough to send equity futures soaring. So far today, that is not the case.
- ECB CUTS EURO-AREA INFLATION FORECASTS FOR 2014 THROUGH 2016
But wait, weren't lower oil prices stimulative?
Here's SaxoBank's quick guide to all the bazookas Draghi has unleashed or promised to...