Nowotny playing his cards close to his chest regarding the future ECB path is unsurprising, however, the Social Media Report claims are a little more worrying given they somewhat write off fresh action for the ECB's september meeting - something which many banks/ consensus thought would be the case, given the persistently low Euro and hints from ECB minutes/ Draghi that maturity extension would be likely at the September meeting. However, the authenticity/ reliability of the reports has to be considered given the source is social media.
On a more certain note the ECB Polled forecasters posted dovish/ EUR economic outlook figures for EUR, downgrading GDP and readings for 2017 and 18, with 2016 staying unchanged .
1. This personally doesnt change my material medium-term short EUR$ 1.1100 trade as the macro headwinds/ future headwinds described in previous posts still go unpriced. Though the short view is weakened slightly IF the above "no extension" is true since some of the future EUR$ downside was based on further ECB easing. Though all of which is just speculation, and without any conviction from officials, waiting for the September decision itself seems the smartest thing to do continuing short - especially as forecasted GDP/ figures have been reduced which is for the EUR and as the USD leg of the trade continues to strengthen as rate hike expectations continue to increase in this risk-on market with Fed Funds Opt Implied probs now trading at 19.5% for Sept, 20.8% Nove and 40% for Dec, up from yesterday at 18.8, 20 an 39.8 - the risk-on bias already started today will likely see these probabilities continue to strengthen until the end of the day.
ECB Member Nowotny Comments:
-ECB's Member Nowotny: "In principle decision from 2nd June not to employ new monetary tools remains true, new uncertainties have emerged."
-ECB's Member Nowotny: Still open on whether will be phased out gradually or not
-ECB's Member Nowotny: Future path Decision on to be made in Q4
-ECB's Member Nowotny: EZ 2017 Seen Over 1%, Sees No Acute Danger Of Deflation
-ECB's Nowotny: BREXIT Effect on Eurozone GDP expected to be less than IMF forecast
-ECB's Nowotny: Should not over dramatise situation regarding Italian Banks
ECB Polled Forecasters:
-ECB: Polled Forecasters See Eurozone 2016 HICP at 0.3%, Matching Previous Quarter
-ECB: Forecasters See 2017 HICP at 1.2%, vs 1.3% Seen in 2Q
-ECB: Forecasters See 2018 HICP at 1.5% vs 1.6% Seen in 2Q
-ECB: Forecasters See 2016 GDP Growth at 1.5%, Matching Previous Qtr
-ECB: Forecasters See 2017 GDP Growth at 1.4% vs 1.6% Seen in 2Q
-ECB: Forecasters See 2018 GDP Growth at 1.6% vs 1.7% Seen in 2Q
-ECB: 55% Of Respondents Included Estimate of UK Referendum Impact in Forecasts
*See attached posts for more EUR$ downside fundamentals*