I like Mario Draghi. He smiles. He is even playful. He confesses, like a naughty schoolboy, that he has forgotten the first part of the question because it was too long and, once it is repeated, continues to answer the question he wants anyway. He is clearly beyond competent at delivery. But what can you read from this overflowing confidence? Is it analogous to the manager who says that he is definitely, DEFINITELY not selling Ronaldo and thus, just by denying it so forcefully, is more likely to than ever?
His re-iteration of the basic role of the ECB, price stability, numerous times during his answers today shows that the message of Weidmann/Bundesbank is given as much value as the message of ‘the Euro will survive’.
He speaks plainly and this is in welcome contrast to the verbosity of previous international spokesmen of the Euro. Is it simply that he is much better than others or that the role allows an independence and detachment which frees up the delivery? I think the latter for sure.
So, how will the liquidity junkies in the markets react? 10yr bonds in Spain&Italy will stretch and 2yr bonds will contract briefly. The focus will shift to Spain&Italy’s intentions towards applying formally to the EFSF and the public’s response to being asked for a redoubling of fiscal contraction efforts against a backdrop of the worsening exports/employment/growth/personal liabilities. This will be cautious and will only move when the “modalities” of the ECB primary market purchasing become clear via the ECB committees who have now been given “clear guidance”
A likeable and cool-headed character just did nothing but his mere presence is calming.