There is a very important detail of Draghi’s proposed “ECB QE Program” that looks to have escaped the larger headline news (suggesting that Draghi’s program will provide the next boost for markets and ultimately save The E.U Zone from disaster ).
Draghi suggested last week that The ECB “will not be buying securities if” their yields are below the ECB’s deposit rate of minus 0.2 percent.
Well…….with Eighty-four of the 346 securities in the Bloomberg Eurozone Sovereign Bond Index with rates below zero ( including all German bonds due in six years or less ) it remains to be seen just “what will be bought” and in what kind of amount.
We’ve all seen Draghi “talk the talk” so many times in the past, so again the question comes to mind if “this time”he can “or will” walk the walk.
Imagine the set up for markets so widely expecting the ECB QE Program to “somehow” put a shelf under the economic destruction currently sweeping Europe…only to realize that once again Draghi pulls the carpet out from under, offering far less than what was originally proposed.
It would not surprise me in the least to see the final bottom to be put in on The EURO triggered by a less than expected result from The ECB ‘s “supposed” QE Bazooka.
We’ll find out here on Monday / Tuesday as the program is expected to begin.