Discord is brewing at the European Central Bank.

Draghi

Draghi showing how many days he might have left at the ECB

A Reuters story yesterday cited to insiders who lamented the leadership of President Mario Draghi. His unpopularity must be serious if people went to the press two days before Thursday’s ECB decision.

I explained why the euro rallied on the report yesterday but I still don’t know what to do on a headline like “Draghi resigns from ECB”.

On the one hand, he would probably be replaced by someone more hawkish and it would delay sovereign QE at least a few months (if not indefinitely).

On the other hand, uncertainty is the enemy of any asset and discord at the ECB can hardly be qualified as good news for Europe.

Two trades that I think are a sure thing are selling European stocks and periphery bonds. That will mean outflows from Europe and that should undermine the euro.

What do you do if Draghi resigns

Buy the euro

Sell the euro