After the ECB left the rates unchanged, Mario Draghi faces the press. Many analysts expect him to drop a hint about more monetary easing in December, when the ECB publishes more forecasts.
Analysis: Draghi’s 5 blows to EUR/USD
Follow a live coverage of the event below.
Here are some key notes:
- EUR/USD begins the event stable in the lower range: 1.13 to 1.1340.
- The meeting is in Malta this time
- Re-assessment of QE in December
- EUR/USD crashes to 1.1240
- In the meantime, US data beats with jobless claims at 259K and continuing claims at 2.17 million.
- GDP expected to continue growing.
- Weaker than expected foreign demand.
- Domestic demand should be supported by the ECB action.
- Risks are to the downside due to emerging markets.
- Increased uncertainty has recently manifested itself and this risks the euro area demand
- Inflation is low
- Annual HICP inflation rates to remain low because oil
- Base effects related to oil fall in late 2014 to push inflation higher.
- 2016 and 2017 to see higher inflation because of economic improvement
- EUR/USD low so far is 1.1227.
- Draghi also calls on governments to do more, have their share.
- EUR/USD loses 1.12
- Draghi says they discussed a cut in the deposit rate
- Draghi also used the word “vigilant†that Trichet used before rate hikes. The market sees that as a hint to cutting rates in December.
- EUR/USD reaches a new low of 1.1182.
- Draghi is using all his skills to hurt the euro without firing one shot.
- EUR/USD low so far has been 1.1177.
- The ECB expressed worries about the exchange rates
- And they are worried about a deflationary spiral.
- Oil prices can turn into inflation expectations and then into a deflationary spiral
- Draghi wants governments to do more: infrastructure spending and not only structural reforms.
- Press conference ends
