After a barrage of media trial balloons (as recently as today) meant to temper the enthusiasm of Euro bulls now that the EURUSD is back to 1.20 and threatening European corporate profitability, Mario Draghi’s Sintra hawkishness is a distant memory.
And so, with the ECB’s policy decision only hours from now, a “trapped” Mario Draghi finds himself in a quandary: with less than 4 months left until the formal expiration of the ECB’s €2.3 trillion QE program, he will likely start laying the groundwork for the central bank’s stimulus reduction – after all the ECB is rapidly running out of bonds to purchase – but without revealing too much as that will send the EUR surging, and he will also hold off on any major commitment, as an explicit backing off his recent hawkishness could collapse the EUR and send Bunds right back into NIRPatory.
Which path will he take?
With that in mind, courtesy of RanSquawk, here is a full preview of what to expect (or not) from the ECB president tomorrow.
Rate Decision due at 1245BST/0645CDT and Press Conference at 1330BST/0730CDT
RATE/ASSET PURCHASE EXPECTATIONS
