The latest ECB interest rate decision and presser out today at 12.45 and 13.30 GMT
With recent focus on all things China, equities and oil we might be forgiven for thinking that Draghi & Co may take up less of the markets' attention but Super Mario is more than capable of springing surprises.
The question is will he? Most analysis is looking for a muted ECB delivery today and I would tend to go along with that premise but as always we must be prepared for the unexpected.
So what might that be ?
Talking the euro down is always a tool in his box but in real terms have we seen so much of a euro appreciation since December to warrant such direct verbal intervention ?
Not really. Ok so EURUSD and EURGBP have made some solid gains as have the commodity-linked pairs such as EURCAD and EURAUD but EURJPY still has a soggy feel to it. None of this is significant enough though in the bigger picture to have Draghi & Co foaming at the mouth or even really concerned.
The correlation between equity falls and euro appreciation as a funding currency is hit and miss and certainly not to be trusted. So pre-empting further equity market collapse as a potential trigger for sustained euro rallies has no real foundation either.
Don't rule out some euro rate reference in the presser and/or Q&A though as it will be a hot topic amongst the assembled audience at least. Or should be.
Will the ECB offer anything new on QE measures ? Unlikely again as they've often stated it takes a while to see the full impact so I imagine a wait n see scenario playing out. Recent inflation data is encouraging if only stopping the rot.
Draghi is a master of his trade now though and he won't pass up the chance to throw in a curve ball or two should he have the agenda so let's once again trade the fact.
Either way we should see some volatility in these fragile markets and opportunities on which to capitalize. Remember though that the ECB is only part of the picture right now.
Will Draghi be playing a different tune today?
