Thursday, 17 August 2017

ECB Not In A Hurry To Cut Stimulus; Wait Continues

Posted by Anonymous at 13:08 Labels:

The Federal Reserve symposium at Jackson Hole, Wyoming has been shaken up by reports saying European Central Bank President Mario Draghi will not be announcing any policy-related decision during the event.

According to a report from news agency Reuters, Mario Draghi will rather focus on the topic of the event - “Fostering a dynamic global economy” and leaving policy aside.

While investors were of course expecting Draghi to move forward with his hawkish rhetoric regarding monetary policy normalization, it was actually an easy guess that he would opt to wait until fall to unveil any concrete measure on that subject.

Why? You know there is no one single answer to that. However, keep in mind that Germany, the bloc's first economy, is holding elections in September.

And as it's now a fashion in Europe, power will be at stake between status quo Angela Merkel and anti-EU far-right ultra-conservative movements. Familiar? Yes indeed, a clue: baguette :)

The Jackson Hole meeting is an annual event which gathers central bankers from all around the world to discuss one specific topic. Nevertheless, there were several occasions when the conference was used by policymakers to announce key decisions.

ECB disappointing news came hard on the euro, sending the EURUSD to an intraday low of 1.1692 on Wednesday. The obvious immediate measure for the ECB is to reduce its massive bond-purchasing program of €60 billion per month.

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