How much is the ‘promise’ of a European Central Banker worth? As European macro data in the last month has plunged at its fastest rate in 6 years, equity markets have, of course soared back to near multi-year highs (EuroStoxx 600 up 5% in the last week alone). We only hope that the equity markets really do know something different this time – as opposed to the last two times we saw this kind of disconnect. The answer – Draghi’s ‘whatever it takes’ promise is maintaining a 30% illusion of wealth in European equities over their macro reality.
It’s different this time – the disconnect that we have seen twice before in the last 5 years is ‘transitory’
as the last 25 days have seen the biggest plunge in macro reality in almost six years…
Charts : Bloomberg.
Source : Zerohedge.