Mario Draghi: ECB will pull out QE, EUR not react

Mario Draghi said Eurozone inflation is "autopilot", allowing the ECB to withdraw its bond purchase in spite of growing fears about global trade war.

To the disappointment of all EUR-investors, the central banker said the main risks stemming from the increasingly strong protectionism in Europe. "Our confidence in inflation is rising, although uncertainties surrounding global factors, including the threat of increased protectionism, have become more prominent, the risks associated with the Eurozone growth prospects remain broadly balanced." "Draghi said.

In spite of Draghi positive tone, the EUR did not register an increase, and even on the contrary, over the last 5 hours, there were strong sell-offs, most likely due to the poor development of the Brexit deal, which would, if absent, lead to colossal losses for both parties. On the other hand, if we consider the investor behavior in 90% of the cases, the news about QE termination is accumulated in the price of the euro as early as the day of the last Central Bank meeting.

Source: Bloomberg

Chart: Used with permission of Bloomberg Finance L.P.

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