Draghi to face a Greek grilling at today's ECB monetary policy meeting
It's Draghi day today and the July monetary policy meeting from the governing council. There's no risk of a change in policy so we can scrub that off the list
Greece will be the main topic today and Draghi will be facing plenty of questions. The ELA will be one of the main talking points, though Draghi may take the easy exit and reconfirm that the council will be making their decision after the meeting, as touted earlier this week
He will probably also be unwilling to dive into the Greek mess too far as it crosses the political line on a lot of aspects. The row with Schaeuble is likely to crop up so expect soothing words about that
In trying to keep some distance from all things Greece, the main points he's likely to make will be on the financial stability side and that's where we will get any decent price moves. Questions on whether the ECB are being choosy on their QE purchase times might come up but I expect that he will strongly reiterate that QE will be pumped in full and that the ECB will use every tool at its disposal to maintain price stability in the Eurozone for all members. That will keep the sellers happy
Greek exit questions will be fired at him and he'll furnish the same response I've detailed above
In the current environment it's hard to see how he could be hawkish in any situation so the Euro will be looking down not up
While we should expect the normal script we should also expect his rhetoric on that to be stronger, should he get bombarded with Greek questions. The ECB are a bit part player in the Troika, so far as they just apply what the politicians give clearance to
As far as trading it goes, I think the play is to fade any general comments that send the euro higher. If he steps outside the box with any comments then we'll get a bigger move, and if it's an upside move I'd expect it to be well sold into as well. The downside will be where the real action may be at and if the euro can get down to test the low 1.08's we could have some fun and games
Policy wise these meetings are now duds, unless the data craters, so it's all about the patter
It's time to talk Greece