Draghi’s words always do the damage, so position accordingly
The ECB decision today is perhaps the most-scrutinised in nearly two years as negative rates are expected. Markets have been oversupplied with research on what is expected in the actual decision and we do not intend to add to the negative rates discussion. Most investors have probably made up their minds and have positioned accordingly. Amid the uncertainty, the only certainty is that Draghi’s comments – whatever they may be – will be far more impactful than decision itself. Looking at the 150 minutes’ worth of price action in EURUSD before the release until the end of the press conference, we find that Draghi’s comments are worth over twice as much as decision release, and on occasion he can also change the market’s interpretation.
Read the full report: UBS