Bloomberg report

  • ECB is said to want extreme prudence on communications and policy

The ECB is jawboning hard and desperate to keep the euro below 1.20.

A report from Bloomberg, citing unnamed Eurozone officials familiar with the matter, reports that ECB policy makers may not be ready to finalize their decision on next year's QE program until December.

  • The governing council has no appetite to rush into a decision next week
  • Full details of the plan may not be settled at Oct 26 meeting
  • Policymakers don't want to surprise the market before they've settled on details
  • Euro's rise after Draghi's June 'reflationary forces' and last week's talk at Jackson Hole shows how sensitive markets are
  • Changes to policy likely to move even slower than expected

The euro jump doesn't show how sensitive markets are. It shows how certain markets are that it's only a matter of time until the taper and tightening comes.

As for the short term, this latest little bit of jawboning has sent EUR/USD down to 1.1922 from a high of 1.9080.