Taper or not to Taper
After Jackson Hole, markets were left with no clearer picture on when ECB President Mario Draghi would begin the ‘tapering’ process of the QE program the ECB adopted in the aftermath of the 2008 financial crisis.
Although an impressive plethora of eurozone productivity and business confidence readings sit at 8-year highs, the ECB stance on making monetary adjustments have been more often than not backed up by its concerns surrounding the sluggish Inflation numbers the single state bloc has struggled with since May 2017. Today’s reading of 1.5% sees a 0.2% rise since July and marks the revival of Inflation to a union bloc that aside from French elections risk in Q1, has been quietly recording lower unemployment, stronger productivity and stable wage growth. The September meeting of the ECB can’t come soon enough for investors who have started to view the euro as a ‘safe-haven’ currency.
Anthony Kurukgy, Senior Sales Trader, comments on Eurozone ECB.