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22 Jan 2015
Draghi’s speech roundup – ECB announces Euro 1tr+ package – Investec
FXStreet (Barcelona) - The Investec Desk highlights the key points from today’s Draghi’s speech, noting that the ECB announced a program greater than the market expectations, sending euro lower.
Key Quotes
“The ECB kept its key rates on hold today as expected, slightly disappointing the market at 12:45 by not giving any detail on a highly anticipated QE program. The ECB instead announced that they would “communicate further measures on monetary at the press conference” beginning at 13:30.”
“At the ECB press conference ECB President Mario Draghi did announce the QE program the market had been waiting for, announcing purchases of EUR 60 billion a month beginning in March 2015 until September 2016.”
“This over Euro 1 trillion package was greater than markets had expected and the Euro dropped quickly against the Pound and US Dollar on the announcement of the large stimulus package.”
“Mr Draghi also noted the program will be coordinated centrally by the ECB, in proportion to the paid in ‘capital key’ contributions of each Eurozone member to the Central Bank.”
“With regard to the sharing of hypothetical losses, the Governing Council decided that purchases of securities of European institutions, purchased by National Central Banks, will be subject to loss sharing. The rest of the NCBs’ additional asset purchases will not; this looks to be a compromise with this having been a key point of debate amongst Governing Council members ahead of today’s meeting.”
“Finally President Draghi re-iterated the key rates are now at their lower bound.”
Key Quotes
“The ECB kept its key rates on hold today as expected, slightly disappointing the market at 12:45 by not giving any detail on a highly anticipated QE program. The ECB instead announced that they would “communicate further measures on monetary at the press conference” beginning at 13:30.”
“At the ECB press conference ECB President Mario Draghi did announce the QE program the market had been waiting for, announcing purchases of EUR 60 billion a month beginning in March 2015 until September 2016.”
“This over Euro 1 trillion package was greater than markets had expected and the Euro dropped quickly against the Pound and US Dollar on the announcement of the large stimulus package.”
“Mr Draghi also noted the program will be coordinated centrally by the ECB, in proportion to the paid in ‘capital key’ contributions of each Eurozone member to the Central Bank.”
“With regard to the sharing of hypothetical losses, the Governing Council decided that purchases of securities of European institutions, purchased by National Central Banks, will be subject to loss sharing. The rest of the NCBs’ additional asset purchases will not; this looks to be a compromise with this having been a key point of debate amongst Governing Council members ahead of today’s meeting.”
“Finally President Draghi re-iterated the key rates are now at their lower bound.”