Mario Draghi Explains Why The ECB 'Taper' Is So Positive

Following the announcement of an 'as expected' dovish taper, markets have moved but not nearly as much as we suspect Mario Draghi would have liked. Therefore we expect him to drop a few tapebombs duiring the press conference in an effort to reassure 'investors' that 'whatever it takes' is still alive and well and buying negative-yielding bonds is still a no-brainer...

Draghi has not surprised, and is following the dovish QE taper announcement earlier, although the Q&A will likely be interesting. 

Draghi is emphasizing that rates will not be changing until "well past" the end of QE, and reiterates the terms of the QE tapering (EUR30bn per month, until September 2018). Draghi discussed inflation, highlighted that domestic prices pressures "remain muted", and even that inflation is "slowing, due to energy-price effects". He also said that "core inflation has yet to show convincing upward trend"

Still, he does note that "wage growth has increased somewhat" and as some have noted there has been an interest addition to the language, namely "very substantial" has been subtly changed to "ample" with regards to necessary stimulus.

Here are the key headlines: 

DRAGHI SEES RATES AT PRESENT LEVEL WELL PAST END OF QE 

DRAGHI: ECB WILL REDUCE MONTHLY BOND BUYING TO EU30B IN JAN. 

DRAGHI SAYS ECB WILL BUY BONDS UNTIL AT LEAST SEPT. 

DRAGHI REITERATES PLEDGE TO BOOST QE IN SIZE, LENGTH IF NEEDED 

DRAGHI SAYS ECB WILL REINVEST FOR EXTENDED PERIOD AFTER QE END 

DRAGHI SAYS REINVESTMENTS WILL HELP DELIVER APPROPRIATE STANCE 

DRAGHI EXTENDS FULL ALLOTMENT IN REFIS THROUGH END 2019 

DRAGHI SAYS DECISIONS WILL PRESERVE FAVORABLE CONDITIONS 

DRAGHI SAYS DOMESTIC PRICE PRESSURES REMAIN MUTED 

DRAGHI SAYS RECALIBRATION OF QE REFLECTS CONFIDENCE ON PRICES.