On Thursday morning, at around 7:15 EST, WSJ reported that Mario Draghi would address Jackson Hole for the first time in three years.
“Mr. Draghi’s speech in Wyoming will take place less than two weeks before the ECB’s September policy meeting, and will provide an obvious opportunity to signal a policy shift before the blackout window closes a week ahead of the meeting,” the Journal wrote.
Yes, “an obvious opportunity,” to telegraph the imminent wind down of ECB stimulus.
The story served as a kind of counterpoint to Yellen’s dovish lean on Capitol Hill. Have a look at how this played out in, for instance, 10Y yields in the US:
Yellen’s message received a little too dovish and no one besides CAD traders cared about Poloz? No problem: we’ll just leak something about Draghi speaking at Jackson Hole to WSJ.
On Friday morning, in the latest attempt to micromanage expectations on an hourly basis, the ECB turned to its favorite media outlet when it comes to leaking potentially market-moving tidbits, Reuters. To wit:
The European Central Bank is keen to keep its asset purchases open-ended rather than setting a potentially distant date on which bond-buying will stop, to retain flexibility in case the outlook sours, three sources familiar with the discussion said.
By not saying when its net bond purchases will fall to zero, the ECB hopes to underline that there is no preset course for its stimulus program, and that any changes remain dependent on economic data, with a special focus on wages, the sources added.
They held up the Federal Reserve’s exit from its asset buying in 2014 as a potential blueprint, noting the U.S. central bank’s unwillingness to publicly target an end-date.
“The Fed has done the most successful exit so it’s the example for us to study,” said a source who asked not to be named. “The important thing is not to pre-commit and keep it very gradual.”
Well, either people are sick of trading off these reports or the robots are asleep at the wheel, because this hit the wires and then…. nothing. Crickets.
“More ECB Sources Fail to Shake Markets Alive,” the Bloomberg headline reads. The story notes “exceedingly low volume.”
It looks like, for today anyway, US CPI is all that matters.
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