"In fact, we continue to face a number of structural challenges that are holding back a more dynamic expansion of the euro area economy. So the right policies need to be designed to address existing vulnerabilities and challenges and, ultimately, secure higher sustainable growth for the euro area".
- Mario Draghi, the ECB President
On Monday 21 of November ECB president Mario Draghi, during his speech has urged the European Union to stay united in the face of different challenges such as Brexit as he warned that the cohesion of Europe is being tested. Speaking in the European Parliament in Strasbourg, Mr Draghi noted that "The euro area recovery continues to proceed at a moderate, but steady, pace. It has shown remarkable resilience to adverse developments and uncertainties emanating from the global environment." said that Europe needs to respond "cohesively and decisively" to the current challenges facing Europe. Overall, Mr Draghi maintained a neutral tone and he is not prepared at this stage to offer strong hints over the likely policy action at December's policy meeting. There were also no attempts to steamroller the ECB Council into policy action. The stated above comments will maintain expectations that the ECB is not planning to announce some form of bond-buying extension, although the details are still in discussion.
In the meantime, reaction to the speech was limited as markets remained in a consolidation phase with EUR/USD finding support just below the 1.0600 level.
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