Ray Dalio: Don't fade Mario Draghi
Hedge fund titan Ray Dalio after the ECB
Ray Dalio is one of the world's best macro traders and he sent out a statement on what happened to the ECB and Mario Draghi.
"There was going to be [US dollar] selling on practically any announcement," he wrote. "The market's reaction reflected more about the positioning and erratic behavior of players than the inappropriateness of ECB monetary policy."
Dalio does argue that Draghi should have done more in order to reach 2% more quickly but recognizes that he was constrained by the ECB hawks. Eventually, Dalio believes he will get it right.
"At all the key moments, he has done the right things and the whole world is better off because of it," he wrote. " By now the world should know, don't fade Mario Draghi."
What does it mean? It means he believes the ECB will eventually introduce more stimulus. That argues for buying European equities and shorting the euro. As usual, it's a matter of levels and timing.
Here's the full statement: