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What ECB President Mario Draghi Might Say
Given that the first 3-year LTRO is finally having a positive impact, while the macro-economic data is “only” pointing to a mild recession leads to believe that the ECB will not announce any new measures today. As such, the opening statement is unlikely to provide market participants with any new information and instead Draghi is widely expected to reiterate that economic uncertainty remains high. At the same time he will likely warn that states should not use this as an opportunity to delay the implementation of austerity measures, since doing so is almost certain to have an adverse effect on money markets which only recently began to operate at a more normal level. Nevertheless, despite the improvement in various credit metrics, risk of a relapse is high, especially since officials have been unable to conclude debt swap talks, while pressure on the ECB is mounting to contribute to PSI.
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