Next week the ECB has its final monetary policy meeting for 2014 (and the last until late Jan as they switch to a 6 weekly schedule). Credit Suisse says that Draghi will use the meeting to explicitly announce that they are prepared to undertake a large scale asset purchase program including sov QE.
They previously thought such an announcement would come in Q1 2015 but say that Draghi’s speech last Friday has tipped the balance by marking a 2further important step in the direction of sovereign bond purchases”.
Last week I offered a poll on whether Draghi’s speech was another sign of the ECB doing whatever it takes or a sign of desperation. The results were pretty even with 51% of you saying that the ECB are still firmly in control.
I’m in the camp that thinks that there is good chance of Draghi dropping a bomb next week to carry him through the end of 2014 and into 2015.
