Starts Q&A
- Assessment of counsel: doesn't want to underplay risks
- softer patch 1st seemed to extend into second-quarter in some countries
- Sees increasing uncertainty from risks
The EURUSD has moved to new lows after his comments on risk. Price is breaking below the 1.1712-17 support area. The 1.16797 (50% is now targeted). The horse has left the "next barn" on the break.
- The soft patches will continue in some countries in Q2
- By and large the situation is overall similar and risks remain broadly balance
- Increase in geopolitical uncertainty and domestic uncertainty.
- On growth should see progress on growth from fiscal expansion in United States and in medium-term euro zone
- did not discuss reinvestment policy. Will discuss at future meetings
- market reaction shows inflation self sustained
- The characteristic on policy remains be patient, prudent, and persistent. The decision was unanimous
- There's a desire to keep optionality open
- Draghi says asset purchase program is not disappearing. It remains in monetary policy toolbox
- Did not discuss tapering options
- We should dramatize changes in government policies too much
- Italy discussion not meaningful today
- Expects rates to remain unchanged to at least the summer of 2019
- If through the summer meant September, we would have said September (HMMMMM)
- Through the summer was intentially not precise
- We have not decided reinvestment yet. It is an important decision. It is not a marginal decision
- Reinvestment is one of our main policy tools
The EURUSD has moved below the 50% retracement target now at 1.16797 as Draghi fails to convince the market that he is confident about anything.
- The projections do not contain trade measures not implimented yet.
- The direct effect from trade measure are pretty limited
- If there is general retaliation, effect could be more significant
- The effect of trade measures and retaliations are also on confidence. Which is hard to measure.
