Following the announcement of an 'as expected' dovish taper, markets have moved but not nearly as much as we suspect Mario Draghi would have liked. Therefore we expect him to drop a few tapebombs duiring the press conference in an effort to reassure 'investors' that 'whatever it takes' is still alive and well and buying negative-yielding bonds is still a no-brainer...
Live Feed (due to start at 0830ET)
Draghi has not surprised, and is following the dovish QE taper announcement earlier, although the Q&A will likely be interesting.
Draghi is emphasizing that rates will not be changing until “well past” the end of QE, and reiterates the terms of the QE tapering (EUR30bn per month, until September 2018). Draghi discussed inflation, highlighted that domestic prices pressures “remain muted”, and even that inflation is “slowing, due to energy-price effects”. He also said that “core inflation has yet to show convincing upward trend”
Still, he does note that “wage growth has increased somewhat" and as some have noted there has been an interest addition to the language, namely “very substantial” has been subtly changed to “ample” with regards to necessary stimulus.
Here are the key headlines:
- DRAGHI SEES RATES AT PRESENT LEVEL WELL PAST END OF QE
- DRAGHI: ECB WILL REDUCE MONTHLY BOND BUYING TO EU30B IN JAN.
- DRAGHI SAYS ECB WILL BUY BONDS UNTIL AT LEAST SEPT.
- DRAGHI REITERATES PLEDGE TO BOOST QE IN SIZE, LENGTH IF NEEDED
- DRAGHI SAYS ECB WILL REINVEST FOR EXTENDED PERIOD AFTER QE END
- DRAGHI SAYS REINVESTMENTS WILL HELP DELIVER APPROPRIATE STANCE
- DRAGHI EXTENDS FULL ALLOTMENT IN REFIS THROUGH END 2019
- DRAGHI SAYS DECISIONS WILL PRESERVE FAVORABLE CONDITIONS
- DRAGHI SAYS DOMESTIC PRICE PRESSURES REMAIN MUTED
- DRAGHI SAYS RECALIBRATION OF QE REFLECTS CONFIDENCE ON PRICES
And from the Q&A:
- DRAGHI SAYS ECB DIDN'T DISCUSS QE COMPOSITION AS OF JAN.
- DRAGHI: ECB TO CONTINUE TO BUY SIZEABLE AMOUNTS OF CORP BONDS
- DRAGHI: ECB TO PUBLISH MONTHLY REDEMPTIONS AS OF JANUARY
- DRAGHI SAYS ECB DIDN'T DISCUSS ALTERNATIVE QE SCENARIOS
- DRAGHI SAYS ATMOSPHERE IN COUNCIL WAS POSITIVE
- DRAGHI SAYS GOVERNORS STRESSED UNABATED GROWTH MOMENTUM
- DRAGHI SAYS ECB FORESEES V-SHAPED FORM OF INFLATION
- DRAGHI SAYS THERE WERE DIFFERENT VIEWS IN COUNCIL ON SCENARIOS
- DRAGHI SAYS GUIDANCE ON REINVESTMENT NOT RELATED TO RATES
- DRAGHI SAYS STOCK OF QE HOLDINGS HAS BECOME MORE IMPORTANT
- DRAGHI SAYS QE DESIGN FLEXIBLE ENOUGH TO COPE WITH ANY LIMITS
- DRAGHI SAYS REINVESTMENT IMPORTANT COMPONENT OF ECB POLICY
- DRAGHI SAYS ECB DIDN'T DISCUSS QE PARAMETERS, LIMITS TODAY
- DRAGHI SAYS REINVESTMENTS TO BE CARRIED OUT IN FLEXIBLE WAY