While the market may be ready and positioned it’s going to be a bit like a coiled spring. As we head towards the Jackson Hole speeches be aware that we might see some choppiness as traders look to take/close a final position or some whose bums are squeaking too much and start closing up their books.
For all the excitement I’m hoping (but not optimistic) we get another moment like the one Mario Draghi gave back in 2012 when the European project was hanging on by a thread.
His “whatever it takes” speech at the Global Investment conference London 12th July 2012. It wasn’t primed as a big event but what followed went down in history as it was the day that Mario single handedly saved Europe with 3 words.
(h/t to TradeAlerter on twitter for the reminder)
It also saw the euro bottom just above 1.2000 and was worth nearly 400 pips over the following two sessions and had rose 9.27% to near 1.3200 by mid September.
EUR/USD Mario Draghi special
He’ll be far from wanting the same reaction in the euro from any speeches going forward, particularly today, but it highlights how much power central bankers can yield over the markets and that we should always be prepared for a shock. With a gap until the TLTRO’s and the European economy getting worse, don’t rule out a Mario special to inject some positivity in his speech today.
