Mario Draghi "Overpromised on July 26 and under-delivered on August 2". Markets reacted accordingly. With the earnings season in the US tapering off, macro factors, more specifically around euro survivability, will start to dominate again. Expect volatility to trend higher.
On July 26, Draghi said, "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough". Investors were caught off-guard by such unexpected comments. That caused an instant rally in the euro, the Spanish 10-year, Dax and the S&P500 future.
On August 2, Draghi could not even deliver a rate cut (benchmark rate stayed at 0.75%) let alone convince policymakers at the ECB and the wider Europe to pursue aggressive policies like Securities Market Purchase, ECM banking license etc. Not surprisingly, all the asset classes fell in unison as soon as Draghi opened his mouth at the bi-weekly post-ECB meeting press conference.
