FXStreet (Łódź) - FXStreet Analyst Jamie Coleman suggests that ECB chief Mario Draghi will focus on two main themes during tomorrow's post-decision press conference: ECB's need to assess the impact of last month's measures and the availability of additional policy tools.
"Draghi will stress that the programs announced in June have not yet been fully implemented. TLTROs won't even launch until September. ABS market rejuvenation is a long-term project and has barely begun."
"'We have additional tools.' He won't go into much detail, frankly because there is no there there. Draghi will bluff, however, saying the governing council stands united if additional easing measures are needed."
"There are outside risks that since the euro heads into the July meeting on firmer footing than it entered the June meeting, he could attempt to talk down the currency. I put the odds of that at about 1-in-3. Perhaps he will repeat that 'brutal' FX moves are unwelcome, as his predecessor Trichet did in 2004 and again in 2007."
"The risk for the ECB is that the market determines that it is truly out of bullets and pushes the euro even higher in an effort to provoke a policy response. Markets love to inflict pain, and that would be a very good way to do it."