ECB’s historical QE program goes out with a whimper

• Incoming data were weaker than expected
• Weaker data reflects softer external demands
• Inflation will continue to converge after buying ends
• Significant stimulus still needed
• GC stands ready to adjust all its instruments as appropriate
• ECB sees a somewhat slower growth momentum ahead
• Sees 2018 GDP 1.9% vs 2.0% prior
• 2019 1.7% vs 1.8% prior
• 2020.1.7% unch
• Underlying inflation remains muted
• 2018 CPI 1.8% vs 1.7%
• 2019 1.6% vs 1.7% prior
• 2020 1.7% unch
• 2021 (new) 1.8%
• Headline inflation likely to decrease in coming months
• Tells governments to pull their fingers out
• Reinvestment technicals to be release after presser

Q&A

• Reinvestments will be made in the same jurisdictions
• External demand is down but still grows
• Drivers of recovery is just weaker but has been down for sometime
• The trade situation is probably a bit better than two months ago
• SME signalled some rising concerns in their business environments, though many reported increase in profits (citing an ECB survey)

EURUSD 1.3339

• We think we have the instruments to address a downturn
• Decision on reinvestments was unanimous
• QE is a pemanent part of the tool box
• It’s there to be used if necessary

And that folks is as good as it got. The real icing on the cake was the Japanese reporter going all that way to ask about the ECB’s 20th Birthday. ?

Draghi surpassed himself in making this probably one of the dullest pressers ever, and most of the press can shared equal blame too.

EURUSD finishes 1.1345 in a 1.1340-70 range