When a Bloomberg report on Tuesday released the genie out of the bottle, that the ECB may follow the BOJ in tapering its QE program at some point in the future, it unleashed a mini bond taper.
And while the ECB quickly denied immediately after the report that Draghi had mentioned any of this, suggesting that Bloomberg was using a trial balloon to gauge the response in the market to any potential tapering, the market remained skittish. Which is why having seen the market’s rather unpleasant reaction, a content ECB has now decided to squash the rumor, that it itself started, when the ECB’s Vitor Constancio said that the Bloomberg report that the ECB is near a taper consensus is not correct.
From Market News:
- CONSTANCIO: REPORT THAT ECB NEAR TAPER CONSENSUS NOT CORRECT
- CONSTANCIO: COUNCIL HASN’T DISCUSSED ANYTHING ON QE TIMETABLE
- CONSTANCIO: NO FOUNDATION TO ALL THE RUMORS ABOUT FUTURE OF QE
- CONSTANCIO: QE TO GO ON UNTIL INFLATION BACK ON PATH TO TARGET
- CONSTANCIO: VERY CONFIDENT OF INFLATION WELL OVER 1% BY SPRING
- CONSTANCIO: ON THE WHOLE, OUR BASELINE SCENARIO MATERIALIZING
The result: an immediate surge in the S&P which just turned green.
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