After declining performance by global markets early in the week, on Thursday, European Central Bank Chief Mario Draghi said “the ECB is ready to do whatever it takes to preserve the euro. . . . Believe me, it will be enough” and markets swiftly reversed the downward trend. On Friday, German Chancellor Angela Merkel and French President Francois Hollande said they are ready to “do everything to protect” the Euro. Additionally, the U.S. Commerce Department reported that second quarter GDP grew at a weak, but expected, rate of 1.5%.
With most economic data and commentary from business leaders pointing toward a global economic slowdown, any action to reverse the trend is welcome news. However, prior comments from Eurozone leaders have led to mixed results. The strong positive market moves last week suggest that expectations are high for how Eurozone leaders will proceed. Hopefully, their actions will support their words and meet expectations. Anything less will be unfortunate.