(EU) ECB Press Conference Draghi Prepared Speech Highlights:
(EU) ECB Press Conference Draghi Q&A Session Highlights:
How to interpret these headlines?
Market sold off on the Euro after the ECB press conference today, mainly due to the lack of concrete measures to match the high expectation set by Draghi’s comments on “will do whatever it takes” to solve the EU crisis. In essence, the ECB didn’t deliver what it promised, and the market decided to punish the Euro by selling it.
Looking ahead, ECB is now tying its involvement with formal bailout requests, which pretty much deters Spain from moving forward due to the harsh austerity requirements that are likely to be included with the bailout; remember, Spanish Banking Aid is Spain’s way of working around the system to recapitalize its troubling banking sector without any sovereign conditions, and I believe we will not see a Spanish Bailout request this year, and that would add more selling pressure to the Euro.
I’d be inclined to SELL the EURO on rallies. We’ve been changing our directions back and forth lately, but that’s exactly what the market has been doing and I believe any thing short of a full-scale bailout for Spain, market is not going to be satisfied and contagion fear should weigh in on the Euro.
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August 2, 2012 by 1 Comment