The Draghi effect on full display in speech
13th November 2015 By: Ranko Berich
Draghi Speech – 12/11/15
The Draghi effect’ was on full display this morning. Mario Draghi used his appearances before European lawmakers to underline that further easing in the eurozone is becoming increasingly likely, weakening the euro across the board as he spoke.
In case the last press conference had not made it abundantly clear, Draghi stated that the ECB would re-examine the size and shape of its QE programme in December. The weakening outlook for eurozone inflation means that any changes to QE are likely to increase the degree of accommodation.
An extension of the current programme past September 2016 is the easiest and most likely first action for the ECB, which was specifically mentioned by Draghi today. Considering that inflation has been at 0.3 per cent or below for all of this year and downside risks are building, Draghi’s willingness to reload the bazooka makes sense.