The market was looking for him to open the door (a crack) to QE this year.
“Policy stance” sounds more like conventional measures but he also said the Governing Council would also use unconventional instruments to safeguard firm anchoring of inflation expectations. The euro rose 20 pips on the headline to 1.3260 from 1.3240 but the bounce sellers are already stepping in and it’s back down to 1.3250.
Other headlines:
- Q2 GDP data confirms recovery remains “uniformly weak”
- Preparations for ABS programme moving forward fast, should contribute to further credit easing
- New long-term long programme has so far “garnered significant interest from banks”
- Expected diverging policy paths in US and eurozone should sustain exchange rate trend
I don’t see why the euro should be bouncing on this speech. This is definitely a step toward QE, albeit a small one and there’s nothing here to reverse the trend in the euro.
