• Will need time to see full positive effects from LTRO

JPMorgan is* out with a note today forecasting a rate cut in Sept and a 1-year LTRO announcement in July. I guess Draghi didn’t get the memo.

  • Draghi adds that ECB has helped banks’ liquidity but is unable to increase their capital or change risk perceptions
  • Now is crucial moment in EU history, “courageous leap of political imagination needed”
  • Euro govts need to spell out common vision