One recurring word prevails in every single Wall Street reaction to Mario Draghi's announcement today: "disappointment"... the same disappointment we warned about yesterday, and which we said could push the EURUSD to 1.09 today, just as happened an hour earlier.
Here is Deutsche Bank's George Saravelos explaining why he is "Closing Our Shorts"
Our premise of continued bearishness on EUR/USD through the end of the year was a “full” delivery from both the Fed and the ECB. The latter leg was a significant disappointment today versus our expectation and we therefore close out the EUR/USD shorts we initiated in our September FX Blueprint. We are keeping all our official 2015-2017 year-end forecasts unchanged.
Here is RBS' Michael Michaelides warning the ECB's credibility is now at risk
The ECB's credibility to reach CPI target at risk after today. ECB has missed CPI target by more than 1% for 25 mos. in a row and nothing Draghi has done today convinces investors that the central bank is getting ahead of the curve, RBS strategist Michael Michaelides says in a Bloomberg interview. ECB is showing its clear deflationary bias. Consequences from today’s major disappointment may lead to a tightening in euro-area financial conditions. Market may reassess ECB’s willingness to do more soon compared with previous expectations.
Here is BofA's Athanasios Vamvakidis repeating the same sense of disappointment:
ECB President Draghi’s argument that more will be done if needed, is not enough given mkt’s high expectations and his past pattern of over-delivering, Athanasios Vamvakidis, strategist at BofAML, says in e-mailed comments. Expectations for today were just too high. ECB easing package is underwhelming, not aggressive enough and below expectations
Here is Citibank's Josh O’Byrne on the market's reaction to ECB disappointment:
ECB’s package of easing measures is disappointing so far, as expectations had built up high in recent weeks, especially after Draghi’s speech on Nov. 20, Josh O’Byrne, FX strategist at Citigroup, says in e-mailed comments.
Pressure on SNB and Riksbank to act is now much reduced, with pressure off EUR/SEK, EUR/CHF
* * *
Finally, the one reaction we are most eagerly looking for, is that of Goldman's Robin Brooks who said yesterday that the EURUSD could tumble 300 pips today on the ECB announcement. We will post it as soon as it hits.