Peak Draghi

Draghi for #Santa🎁 ✨👏🏻📉 #ECB

Socialist in the City

Everyone loves ECB day. The set up for this one was particularly good – I like to think of it as ‘Peak Draghi’. Everyone knew what the setup was, and most people were pretty much on the same page. The market confidently expected:

– A 10/15bp cut to the deposit rate
– An increase in the pace of QE by 10bio
– An extension of the length of QE
– Expanding the scope of QE to include corporate bonds, munis
– An extension of TLTRO

But on top of that, as though they felt that it’d give them some kind of edge, most pundits and market participants also felt they needed to tack on some additional, more esoteric announcements. It’s almost as if everyone was stepping over themselves to predict the most surprising dovish thing. On the table was:

– He might hint at eventually buying equities
– Might make…

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