“I think I will abstain from judging the markets. This is one of the hardest things to do and it is usually quite useless because they do what they want, no matter what.”
– Mario Draghi
Hell no.
And yet, ECB did it…mechanically following their rulebook. Extended liquidity provision and a refi rate cut leaves less ammunition for future, with the former also lessening the need for a long LTRO which, Draghi said, was not discussed in depth. A depo rate cut was, though…but, in my view, chances are slim as a euro banknote. Notably, the euro risks downplayed: “didn’t play any role in today’s discussion”. Coming up next: EMU GDP on Thursday – softer than Q3 reading expected (0.2% q/q), and it does take a reading at or below zero to slam the EUR further down – very unlikely, judging from the recent data.
Read the full report: Market Research
Nordea