Ryan had the headlines on this a good while ago: ECB: March message was way over-interpreted
Check it out for a summary of what the ECB wants to convey to the market
For more, though, here is the Reuters story, Reuters citing unnamed sources (Reuters say six sources):
- With the euro zone economy on its best run in almost a decade and conservative policymakers keen to start winding down stimulus, the ECB gave a small nod to improvement with a tweak of its guidance in early March, axing a reference to being ready to act with all available instruments. But that message did not come across as hoped.
- "We wanted to communicate reduced tail risk but the market took it as a step to the exit," one of the sources said.
- "The message was way overinterpreted"
- Policymakers are keen to reassure investors that their easy-money policy is far from ending, suggesting a reluctance to change message before June, the sources said
Hmmm, there you go. Markets will 'overinterpret' messages from time to time, always have, always will. And thus officials step in with clarifications.
Our job now is to overinterpret in the opposite direction and give these central bankers more to clarify :-D. It's the circle of life (in the markets).
And ... for those ACT traders who listened to my presentation, put this in the context of new info coming in (the clarification), & what the dealers are thinking (if I don't sell here first, someone else will then I'll be playing catch up and getting poorer fills ... so I'm gunna just hit this here bid, and this one, and this one ... and offer there (or get my algos to do it for me)). Just a little flush.
Here is the euro move:
