Inside the ECB meeting,to let the market down the
radical proposals are blocked
Market is not in this weekThe European central bank (ECB)Big loose "rockets".Foreign media, this is because policymakers believeThe euro zoneThe economic outlook improves, and comes at a timeThe federal reserveInterest rates near, unfavorable stimulusThe euroLower forcing it to delayIncreases in interest rates, so I decided to "this want to disappoint the market".In addition, the European central bank PresidentdraghiBefore pushing for aggressive easing from central Banks internal number of criticism, the central bank's hawks do behind the wheel ", buckle under some aggressive stimulus proposal.
The European central bank meeting on Thursday announced the extension of QE time and reduce the overnight deposit rate, more than eighty percent of bloomberg news survey of economists had expected to these measures, but the market expected "rocket" into a "small water gun" : only 10 basis points rate cut, and the main refinancing rate constant, extend QE also only to March 2017, did not emphasize the speed and scale of the to buy bonds.
Knowledge article quoted the next day on Wall StreetThe BritishMedia reported the financial times thereof, according to the European central bank failed to put "tricks" because draghi has failed to convince the five policymakers support intensify loose.Reuters reported yesterday is quoted an insider explains that the European central bank (ECB) disappointed the market is intentional, policymakers it for two reasons:
1, the main reason is that the European central bank's monetary policy decision-making body, "come to the conclusion that the management committee said the need to disappoint the market, because of the euro zone economic outlook has improved, new inflation expectations also does not have the worry that bad".
2, a relatively minor reason is that the federal reserve to raise interest rates approaches, the European central bank easing will further depress the euroThe exchange rate, could force the federal reserve to postpone raising rates.A source say: "there is reason to take out small action, this will not affect the fed, let them do what you need to do."
In addition to the external and internal situation for the European central bank policymakers think that there is no need to make the tough moves, the Reuters said draghi this strategy error.A direct people familiar with the matter said, the European central bank this week before the meeting, Mr Draghi have some open position, the pressure is on to the management committee.The source said.
Draghi deliberately set your expectations too high, trying to force the management committee.This approach has a problem, he was more than the euro zone's central bank governor criticism in private.
Compared with draghi drastic action, the hawkish European central bank official more low-key.According to the Reuters report,
"Most hawks do behind the scenes," Mr Draghi opponents tried to buckle under some of the more radical measures are put forward proposals, "to ensure that the market expected the European central bank measures will never appear in the table."
Whether senior hawks really did all of these "little tricks", on Thursday the European central bank market obvious resolutions have been disappointed, and the market reaction is than the European central bank is expected to strongly.Resolution was released, the euroThe dollarExchange rate jumped nearly 4%.A source said: "we know that the market will react, but so far, those reactions are bigger than we had expected."
Perhaps it is to see the performance of the market, the European central bank meeting the next day, Friday, draghi said publicly, the European central bank monetary policy can be adjusted at any time in the future, to promote the economic goals.The European central bank monetary policy tools is not limited to special, balance sheet is not limited.The dove after the speech, the euro fell back,U.S. stocksHigher.
The figure below shows, released on Thursday, the European central bank resolution and Della JiXinWen conference, the s&p 500 and nasdaq stocks index futures prices plummeted, draghi said on Friday after the big rebound, rebound to plunge level before Thursday.
Yesterday on Wall Street see article also mentions a "fun", it reflects the European central bank officials from one side not expected by the market situation of counter.Draghi on Friday, it said, speaking in New York, the most excites the market than the bank of England Mervyn King before a dialogue with Mario draghi, at that time
King asked: "how are you today's speech is interested in design, try to offset the market part of the response yesterday?"
Draghi honest answer was savagely shocked all central Banks observers: "no... Well, is (Not really... well," of course ")."