ECB: Keeping the powder dry - ANZ

Research Team at ANZ, notes that there were no changes in policy from the ECB overnight and little guidance given away in the press conference either, but this didn’t stop markets from engaging in some fun and games anyway.

Key Quotes

“Markets being markets initially reacted to what Draghi didn’t convey − namely extending stimulus = euro up. However, markets soon sifted amongst the tea leaves. The bias remains towards further easing; there will likely be an extension of QE beyond March 2017 (it’s hard to see an abrupt ending to the program); the ECB may tinker with the parameters of the QE program if it feels necessary for liquidity purposes; and additional corporate bond purchases could of course be included down the track as part of this tinkering. So the signs are pointing to December being dovish = euro back down and USD up.”