Draghi Day

All eyes on Draghi today. Let’s see if the ECB is up for some prevannouncements. From Bloomberg.

The Group of Seven nations yesterday agreed to coordinate their response to Europe’s turmoil, which has tipped at least eight of the 17 euro-area economies into recession and damped European demand for foreign goods. ECB President Mario Draghi, who said last week the monetary union is “unsustainable” in its current form, could choose to withhold further stimulus until governments do more to tackle the causes of the crisis.

“Despite the recent escalation, the ECB seems to insist on getting backing from governments before going ahead with additional measures,” said Juergen Michels, chief euro-area economist at Citigroup Inc. in London. Still, “the current combination of moderating inflation and falling sentiment data are paving the way for lower rates soon.”

“The ECB might want to wait for further corroborating data to conclude that its second-half-of-the-year recovery expectations are challenged,” said Silvio Peruzzo, an economist at Royal Bank of Scotland in London. “We push back our June rate cut to July, but we do not exclude the possibility that the ECB might pre-announce it this week, recognizing the increasing downside risk to the economy.” (Full article here.)