As summer times kicks into full mode in Europe, ECB President Draghi play list is slowly but surely moving away from QE as he sounded more upbeat in a long time. On paper, not a lot was expected from yesterday’s trading session, but in the end we had pretty decent moves in currencies, bond yields and equity markets, largely driven by hawkish comments from President Draghi (less enamoured with stimulatory measures) while softness in equities also reflect concerns over cyber-attacks and Googles European commission fine. In his introductory speech to the ECB forum on Central Banking in Sintra, Portugal, ECB President Draghi took another step down the path of gradual exit from emergency policy measures. He provided an upbeat assessment on the Euro-Zone economic recovery and argued that the slow inflationary response to above-trend economic growth was largely due to temporary positive supply shock and that monetary policy is working to build reflationary pressures.
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