We were very excited in the Banc De Binary offices last week as we were granted an exclusive entry pass into the much-anticipated European Central Bank press conference. Senior Analyst Lauren Carmouche was the lucky lady to attend, and live tweeted Draghi’s speech and its market-moving implications for our traders. We caught up with Lauren after the event to get the inside scoop on the conference. Here’s what she told us:
“It was certainly a lively event. You could feel a tense atmosphere in the room because of the protests, both inside and outside, by people who believe that Greece hasn’t been given enough support by the ECB. There was even shouting from one member of the audience during the event, which is definitely against protocol!
Despite the drama, Central Bank President, Mario Draghi, was very cool and confident. I think that was the point of the conference in his eyes – to create an air of assurance. He wanted to create the expectation of inflation so that people are encouraged to spend and invest, in order to give the Eurozone economy a boost.
The main point you need to know about Draghi’s speech is that after a period of passivity, the ECB will finally embark on an aggressive quantitative easing program to the tune of 60 billion euros per month of both public and private debt. The President claimed that even the anticipation of this stimulus is already having ‘positive effects’ and is helping to create wealth for European citizens alongside the drop in the price of oil.
ECB President Mario Draghi speaks at the press conference on 5th March
To be honest, the conference itself wasn’t so surprising in terms of numbers, but the demeanor and confidence of Draghi was definitive. He stressed that measures already taken by the bank have provided impetus for growth in the Eurozone, and that borrowing conditions are improving and there was better than expected GDP number last quarter. Overall he conveyed a positive outlook.
Draghi certainly left a good impression about the state of the Eurozone and reminded us about all the signs of improvement. However, traders have to remember that it’s his job to create stability, so we have to take his confidence with a pinch of salt. Yes, a recovery is very possible, but let’s not forget that it could still be long and painful.”
