Comments from the ECB's Draghi:

  • Technical aspects will not stop the ECB from full implementation of QE purchases
  • We will look at effects on inflation and then decide what to do
  • Our accommodative policy is being passed through to economy

At the outset of QE, many people warned that the ECB wouldn't be able to find enough supply of bonds. By increasing the share limit, the ECB acknowledged that it's tough to find enough bonds to buy.

  • We have to determine whether this is short term volatility or something longer term
  • Unlikely recent challenges will be quickly reversed

On more QE, Draghi has certainly opened the door. You could say that he signaled that the ECB is now openly considering it.

  • Main source lower inflation forecasts is oil price
  • Secondary source -- far behind -- is the slower closing of the output gap
  • We expect to get much more information on China at G20
  • We've seen a major weakening in emerging market economies
  • There wasn't any discussion about increasing QE

The ECB is much more concerned about emerging markets than the Fed.