Draghi comments in the press conference
- ECB didn't discuss reinvestments
- Enhanced forward guidance has been very effective in aligning expectations with intentions
- At this stage we don't see a need to modify forward guidance
- Exchange rate is not a policy target
- Euro has appreciated considerably over the past year or year-and-a-half
- There hasn't been much of a change in the assessment of the outlook for growth and inflation; or a change in the monetary policy message
- Draghi said latest growth soft patch is give-back from unusual bump in export growth late last year
- Overall risks to growth are still broadly balanced
- One positive development is nominal wage performance, which has been driven by negotiated wages
- The only version of the statement that conveys the policy message is the English version
- Money market expectations are very well-aligned with ECB message
- Expects broad-based wage growth in H2
- Says changing of President only affects rate hike timing in the 'perverse minds of some market participants'
Draghi said money market expectations are well aligned with ECB expectations and currently money markets are pricing in a 57% chance of a 10bps hike in September 2019. There was some feeling Draghi would give a stronger hint about a Sept 2019 hike but endorsing the market pricing is a bit dovish.
