MBS RECAP: ECB Helps at First, Then Draghi Does Damage

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Posted To: MBS Commentary

The European Central Bank (ECB) announcement and press conference were hotly-anticipated as today's key events and they did not disappoint. The announcement itself (out at 7:45am ET) was generally well-received as it hinted at additional bond-buying potential as well as the willingness to cut rates even further if needed. Really, the only shortcoming relative to the most optimistic speculators was that there was no outright cut to the deposit rate. Surely, then, Draghi would be along 45 minutes later to tell the world how carefully the ECB had considered cutting rates in an attempt to aggressively address disinflation and a marked manufacturing slowdown. Alas, no! In fact, Draghi said the governing council of the ECB didn't even discuss a rate cut. He also made a somewhat puzzling case…(read more)

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