ECB press conference wrap up

• Today's European Central Bank's (ECB) press conference held in Cyprus, outside of its headquarter in Frankfurt was overall pretty exciting.

• Euro went ups and downs during the press conference, going as high as above 1.11 and as low as 1.10.

• Some of the press attendees from Greece and Cyprus not only preferred local language but also lost cool over ECB's decision on stopping the waiver for these countries' bonds. President Mario Draghi nevertheless maintained his cool over the happenings.

Key observations -

• ECB is quite positive over the gains in recent economic activities and published data but indicated ECB's intention to carry out the programme completely and went ahead to mention the importance of its successful completion.
  
  
• Draghi shrugged off the market's fear over the shortages of the bonds but acknowledge that half of the Bonds might be outside the Euro area.
  
  
• ECB's staff revised the projection of growth and inflation for the coming years in view that the purchase programme would help by lowering the cost and weaker euro to benefit exports.
  
  
• Real GDP growths were revised to 1.5% for 2015, 1.9% for 2016 and 2.1% for 2017. Inflation is also expected to pick up during the ECB purchase but may remain subdued this year.
  
  
• Credit growth is improving but more towards the household sector compared to businesses. Loans to households increased by 0.9% in January. Money supply as measured by M3 also rose to 4.1% from previous 3.8%.
 
• ECB defended its position on Greek bond waiver and mentioned that conditions to put it in place once again include continued reforms and successful review by TROIKA.
  
  
• Draghi shrugged off accusation over not helping Greece and went ahead in mentioning that ECB has lent Greece € 100 billion already which is 68% of Greece's GDP and highest in the Euro zone.
  
  
• Draghi mentioned ECB's inability to buy Greek and Cyprus bonds in the current QE purchase for the time being. Cyprus is under a bailout programme and its fifth review by TROIKA still pending. For Greece, several reasons. ECB has already hit the issuer 33% limit, Greek bonds are below the investment grade and the review over the current programme is still pending.
  
  
• ECB has a lower limit on negative yield that is the deposit rate at -0.20%. ECB will not be cutting the deposit rates further but will operate on QE front.

 Despite lot of clarifications the talks revolved around Greece and Cyprus more and lot of questions over the feasibility and style of the purchase remained to be answered.

As ECB successfully defended and voiced for its current actions, Euro might continue to face pressure as the purchase programme continues. Focus now shifts to tomorrow's NFP report from US. Euro is currently trading at 1.103 against the dollar.