Draghi: Witnessing improvements in hard and soft economic data

Output gap is ‘pretty wide’ and we only see it closing toward the end of the policy horizon.

Don’t underestimate the bolded comment, it shows how razor thin the margin of error is for the economy (and the ECB). Draghi & Co are fairly optimistic but if they’re wrong they will almost certainly be forced to take some fresh action.

The market is selling the euro on that uneasiness from the ECB. Draghi has given the market the sense that soft data in the near term will mean action, perhaps as soon as next month.