A few hours after the OK from the German Constitutional Court to the anti-spread shield devised by the ECB, the president of the European Central Bank, Mario Draghi, spoke at the European Parliament in Brussels.
The central theme of the hearing was obviously the referendum on Thursday 23 June in which British citizens will decide the fate of Great Britain. According to the poll conducted on June 20 by IG, 45% of Britons are in favor of staying, while 44% will vote to leave. In recent days, investors seem to have convinced themselves that the “Remain” is likely to win, ending the turbulence that characterized the markets last week.
Despite this, Draghi has once again reiterated that Frankfurt is ready for all the contingencies that will arise after the outcome of the English referendum. "It is very difficult to foresee the impact of the British vote in its various dimensions, on the markets and on the economy of the euro area", he announced, but in the event of "Brexit" the central bank will do everything necessary "to make respond to all emergencies". The number one of the European Central Bank did not provide details on any countermeasures that will allow the EU to stem the repercussions deriving from the United Kingdom's exit from Europe. "Our focus is to make our common home, Europe, stronger", concluded the governor.
Before the Economic and Monetary Affairs Committee of the European Parliament, Draghi added that for the economy "uncertainties remain high and downside risks still remain significant due to the persistent state of fragility of the global economy and geopolitical developments".
From a cyclical point of view, the Government confirmed that the economic recovery of the Eurozone "is gaining ground and is expected to proceed at a moderate but constant pace supported by the usual internal demand and by an effective transmission of the monetary policy to the real economy". Also improving investments which, although still insufficient, are beginning to be supported by higher corporate profits and more favorable financial conditions.
Nothing new on the inflation front which "will remain at low levels in the coming months" remaining "rather subdued" to go back up to 1,3% in 2017 and 1,6% in 2018.
We recall that, after Draghi's speech, the markets await the words of the head of the Federal Reserve, Janet Yellen, who is speaking now. Analysts hope to understand what the future monetary policy moves will be and above all the decisions on a possible rate hike in July.
In the meantime, this morning the German Constitutional Court has dismissed the appeal presented by a group of citizens declaring the ECB's securities purchase program to be legitimate.
