Draghi’s Gambit

My pal Peter Boockvar with a plain-English summation of what Draghi did today during the ECB’s policy meeting – and why The Street is not terribly surprised…

As should have been fully expected, Draghi is confirming that the ECB will start buying ABS in which details will be announced after the October meeting. They will also resume purchasing covered bonds which was not expected. The covered bond program was last seen from July ’09 to June ’10 where they bought 60b euros worth and again between November ’11 thru October ’12 where they purchased another 40b euros. A total euro figure for both programs was not given today but Reuters earlier today speculated it could be as much as 500b euros. This would also follow the beginning of the TLTRO program which could total 1T euros over the next year. Combining these moves with another round of interest rate cuts and Mario Draghi is certainly not being shy and the euro continues its downward path. Bottom line, the interest rate moves were a modest surprise as was the covered bond purchase program but the main crux of the ECB’s easing news today, that of ABS purchases, was widely expected. The ECB only modestly cut its ’14 and ’15 GDP forecasts by one tenth from the June meeting and did the same for inflation. Draghi also admitted that the main factor in lower inflation was a decline in energy prices as core inflation is near 1%, not zero. This fact points to the main goal of Draghi’s moves, weaken the euro and cross fingers that it will be the main transmission mechanism for a pickup in growth and inflation.

Source:

Peter Boockvar
Managing Director, Chief Market Analyst
The Lindsey Group LLC

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. alfonso commented on Jan 31

    .

    ñïàñèáî!!

  2. Theodore commented on Feb 13

    .

    thanks for information.

  3. Alex Webcams commented on Oct 07

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  4. canna kush dispensary commented on Oct 13

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  5. Sig Sauer guns in stock commented on Oct 14

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  6. www.dotnek.com commented on Oct 26

    … [Trackback]

    […] Find More on to that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  7. tangerine banque sign in commented on Nov 26

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  8. buy dumps commented on Nov 27

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  9. 마추자 commented on Dec 18

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  10. td online banking commented on Dec 28

    … [Trackback]

    […] There you can find 96287 additional Information to that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  11. afford kasou wigs under $110 commented on Dec 29

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  12. CI CD commented on Jan 11

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  13. replique rolex commented on Jan 14

    … [Trackback]

    […] Here you will find 58362 more Info on that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  14. cheap rolex replica commented on Jan 14

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]

  15. Samsung HL-T5089S manuals commented on Jan 21

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2014/09/04/draghis-gambit/ […]