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7 Nov 2014
Draghi gone “off-piste” - Rabobank
FXStreet (Guatemala) - On November 3 an article was published by Reuters, citing ECB sources, that went into unusually deep detail about the inner workings of the ECB and current discussions being had by the Governing Council (GC).
Key Quotes:
“The article noted disquiet about the management style of President Draghi - including that he had gone ‘off-piste’ when announcing a balance sheet target size for the ECB (it had been agreed but was not to be made public) and also inserting in his Jackson Hole speech a passage highlighting falling inflation expectations (and vowing to counter them)”.
“However, it also laid out the current numerical split on the GC when it comes to support for ECB sovereign QE. Despite Draghi being at pains to emphasise the unity of the GC at their most recent rate setting meeting, we are firmly in the camp of there being ‘no smoke without fire’”.
“Therefore in this piece we take a look at this split, whether Draghi will be able to move more members into the QE camp and whether this even matters when it comes to the probability of QE actually being implemented”.
Key Quotes:
“The article noted disquiet about the management style of President Draghi - including that he had gone ‘off-piste’ when announcing a balance sheet target size for the ECB (it had been agreed but was not to be made public) and also inserting in his Jackson Hole speech a passage highlighting falling inflation expectations (and vowing to counter them)”.
“However, it also laid out the current numerical split on the GC when it comes to support for ECB sovereign QE. Despite Draghi being at pains to emphasise the unity of the GC at their most recent rate setting meeting, we are firmly in the camp of there being ‘no smoke without fire’”.
“Therefore in this piece we take a look at this split, whether Draghi will be able to move more members into the QE camp and whether this even matters when it comes to the probability of QE actually being implemented”.