Countdown to ECB Meeting on Thursday

A good deal is at stake for the European Central Bank (ECB) and the eurozone on Thursday, when the ECB announces what it will do to ward off the threat of deflation and help revive the large stagnating parts of euro area.

Not least at risk is the reputation of the ECB’s charismatic president, Mario Draghi, who just under a month ago said that he and his colleagues on the ECB’s governing council were “comfortable with acting next time”.

Well “next time” is three days away. And if the ECB were to announce no monetary stimulus, or a package regarded as a damp squib, Mr Draghi’s authority would be seen to be impaired.

Apart from anything else, I have rarely if ever come across greater confidence among investment bankers and the media about what a major central bank would do: the era of central banking mystery, at least in the case of the ECB, seems well and truly over.

Unless of course there has been a spectacular mismanagement of market expectations – in which case the consequences for the ECB’s credibility would be pretty close to catastrophic.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza