As the ECB announced that they were making no change to interest rates after their monthly meeting, Mario Draghi probably expected the post announcement press conference to be one of his more uneventful ones. Instead he was covered with confetti, and the meeting cut short by the interruption. Perhaps the German Lady concerned was misunderstood and was so pleased with the efforts of the ECB introducing QE, she was expressing the desire to marry the chairman, then again perhaps not.
Reporting season is likely to dominate the weeks ahead and US equities, in particular the banking sector, have led the way this week. It is early days but earnings have provided the good news on the week as the bulk of the blue chip companies have at least met or beaten analyst expectations.
Despite Thursday’s modest retreat developed equities have so far remained resilient over the past few days, probably helped by the solid start to earnings, in the face mixed macro news. China announced import export data at the start of the week that came in below expectations. Then followed it on Wednesday with retail sales and an economic growth rate that did not quite meet economists' forecasts. The S&P once again downgraded Greece's credit rating ensuring it continues to make headlines as fears continue that it will fail to find a way to meet its obligations. Wolfgang Schauble, Germany's finance minister, added to the concerns as he publically expressed the view that he believes no agreement will be found on the 24th of April at the ministerial meeting in Riga. These concerns have driven German ten year bund yields to new lows of 9bp, with inflation in the euro area currently running above that, anyone buying German bonds today and holding them to maturity would be guaranteed to lose money.
As The World Bank and IMF begin their 2-day spring meeting, ahead of it the IMF has been busy making headlines. The IMF believes that in 2015 40 countries will have average inflation of 0.5% or less, including 5 of the G7 economies. At the same time they point to the lack of inflationary pressures the world currently experiences, the IMF warns of not just taper tantrum but a "super" taper tantrum, at the Federal Reserve's first interest rate rise. The IMF can probably relax on this front for the time being as Federal Reserve President Dennis Lockhart in a speech on Thursday, that "heightened uncertainty" about the economic growth made waiting for a rate rise more feasible. GE report its earnings later in the day, a bell weather for the of the US economy.