How Did The Euro Savior Turn To Terminator?

　　 The European Central Bank instead of personal views, durah continues to control ECB

At the news conference, Dlagi said that the European Central Bank expects (expected) the balance sheet will move towards the level of early 2012. In March 2012, the European Central Bank's balance sheet was 2 trillion and 960 billion euros, now 2 trillion and 100 billion. This means that the European Central Bank's balance sheet has an expansion of 860 billion euros.

This is distinctly different from what Mr Raj himself predicted before the balance sheet expansion, which dispelled doubts about whether Mr Raj is able to "do what he says".

In addition, with regard to the question of whether to expand the stimulus, Dlagi stressed that the central bank's management committee agreed to take measures without hesitation if necessary.

This signal is explained before. Germany The influence of central bank governor Wiedemann and other opponents has been "internally digested", and the support of the whole team to the sudden reversal of the direction of monetary policy by the European Central Bank is almost zero. In the foreseeable future (2 years), lax will be the only theme.

When the general direction is determined, the market shorting the euro is clearly guaranteed.

　　 The "new weapon" is ready. Deterrence or attack depends on the market.

In this conference, another important signal of "Raji" is "QE is in hand, I have in the world". Dlagi said, "if necessary, more measures will be taken. There are two conditions for triggering further actions. One is that the current action is not enough; the other is the worsening inflation outlook.

The current action is to buy ABS and mortgage bonds to raise the balance sheet level to the target level, of which TLTRO's market feedback may be the top priority. From the European Central Bank's purchase action in October and the first TLTRO, it is almost impossible to achieve the target of 8000-10000 billion euro based on existing measures. The TLTRO of.12 is likely to be the most important wind vane in the near future. If banks (markets) are still not interested in TLTRO, that means "forcing" the European Central Bank to exercise more radical easing measures. (this is likely to be what the market wants).

Of course, there is also a premise for inflation prospects (or economic recovery). However, it is an individual who knows that without the help of the central bank, it is impossible for the euro zone economy to self repair.

In the choice of new weapons, the ECB has two options. One is the comprehensive QE, but this may encounter political pressure, so this may be the last resort. The second is the relaxation of the scope of the purchase of ABS and mortgage bonds. In October, the market has heard that ECB may announce the purchase of corporate bonds in December's resolution.

From this logic, this time De La Ji The attitude is very firm: the European Central Bank will expand the scale of its balance sheet to nearly 3 trillion euros. The difference lies in the way of buying and the choice of the market.

In that case, is there any reason why the euro will not fall?

　　 market The preparations are inadequate, and the bears are coming back again.

The last factor that caused the euro / dollar to drop more than 100 points in 30 minutes is that the market is not well prepared.

Although before the resolution and press conference, many investment banks came to the conclusion that "pigeon pie, but no novelty". But this is not the case. Before Wednesday's and Thursday's risk events, the markets were choosing to adjust their positions / closing lists, and the euro / dollar rose to near 1.2530. So when the new bad news came, a large number of followers joined the euro, and finally led to a sharp fall on Thursday.

　　 What will happen in the future? There may be three situations.

1. Dlagi once again successfully staged the "empty city plan". Although the target of 8000-10000 billion euros has not been completed, Delagi has successfully secured enough time for Europe. The previous stimulus measures helped the European economy to recover with the help of the expected effect.

2. The European Central Bank has made a big push into corporate debt and expanded the purchase scope of ABS and mortgage bonds. The result is that private investors are squeezed out of the market, and the result is similar to the Bank of Japan's "contracting" national debt, but ECB does not buy bonds. This is probably the first choice for ECB.

3. If the expansion of debt purchases is still not effective, the ECB's last resort is to fully buy the bonds of the eurozone countries, which announced the arrival of a comprehensive QE. However, the specificity of the euro area means that he will encounter great resistance at the policy level. This will be the final battle of durraji, and he will succeed if he fails.