So far, no good. Mario Draghi has disappointed Dollar bulls as his comments have not offered a “dovish enough” view on the Euro. While he mentioned FX volatility, his comments are very similar to his statement in September and EURUSD is rising.
We continue to expect interest rates to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases.
Net asset purchases, at the new monthly pace of €30 billion, are intended to run until the end of September 2018, or beyond, if necessary.
If outlook becomes less favourable or if financial conditions become inconsistent with progress towards sustained adjustment in path of inflation, we stand ready to increase the asset purchase programme in size and/or duration.
Incoming information confirms a robust pace of economic expansion, which accelerated more than expected in the second half of 2017.
The strong cyclical momentum and the ongoing reduction of economic slack strengthen our confidence that inflation will converge towards our inflation aim of below, but close to, 2%. Domestic price pressures remain muted overall and have yet to show convincing signs of a sustained upward trend.
Recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability.
As Bloomberg headlines:
- *DRAGHI SAYS DOWNSIDE RISKS RELATE TO GLOBAL FACTORS, FX MARKETS
- *DRAGHI: STRONG MOMENTUM COULD LEAD TO POSITIVE GROWTH SURPRISES
The reaction was a further bid for Euros…testing up towards 1.2500…
This is a new 3-year high for the Euro.
German Bund yields are also spiking on Draghi’s comments…
via RSS http://ift.tt/2rGPAwa Tyler Durden