Spot The Moment Mario Draghi Opened His Mouth

Here’s a Heisenberg Thursday morning challenge: spot the moment the following comments hit the wires…

  • DRAGHI: ECB NEEDS MORE INFLATION CONFIDENCE TO CHANGE STANCE
  • DRAGHI: SEE NO NEED TO DEVIATE FROM WORDING OF FORWARD GUIDANCE

Draghi

So just like that, we’re back to last week’s dynamic.

That is, a dollar that looked weak followed immediately by dovish commentary from the ECB (recall last week’s “unnamed” source who leaked the “markets misinterpreted ECB hawkishness” line to Reuters), prompting dollar strength and reinforcing the policy divergence theme.

More via Bloomberg

“Before making any alterations to the components of our stance –- interest rates, asset purchases and forward guidance –- we still need to build sufficient confidence that inflation will indeed converge to our aim over a medium-term horizon, and will remain there even in less supportive monetary policy conditions,” ECB President Mario Draghi says in Frankfurt.

  • “We have not yet seen sufficient evidence to materially alter our assessment of the inflation outlook -– which remains conditional on a very substantial degree of monetary accommodation. Hence a reassessment of the current monetary policy stance is not warranted at this stage”
  • “I do not see cause to deviate from the indications we have been consistently providing in the introductory statement to our press conferences”
  • European macro accounts are hitting EUR/USD bids in Singapore and Hong Kong, according to an Asia-based FX trader.
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