Investors betting on fresh easing measures from the European Central Bank were left empty-handed Thursday, propelling the euro to a one-week high against the dollar. And this must be the queerest interpretation:
“[Mr. Draghi] doesn’t show any urgency that the ECB needs to deal with the prevailing disinflation trend, as low inflation is expected to be a long-term phenomenon in the zone,” said James Kwok, head of currency management at Amundi, which oversees nearly €750 billion ($1.02 trillion) of assets. Data released Friday showed the annual inflation rate slipping to 0.7% last month, matching October’s recent low, which had prompted the ECB to cut its main lending rate in November to 0.25%.
So it seems that, in fact, the ECB is “targeting very low” inflation. Why don´t they come out and say so? Would Germany have anything to do with that decision? 
Update: One of the conclusions of this paper helps explain ECB behavior:
Consequently, if the Phillips curve is flatter, it is vital to respond rapidly and effectively to fluctuations in inflation caused by demand shocks, but also to respond in a prudent way to variations in inflation resulting from supply shocks.
Indicating that the ECB sees the fall in inflation as mostly due to supply shocks!!!
Historinhas 
From the statement:
“According to Eurostat’s flash estimate, euro area annual HICP inflation was 0.7% in January 2014, after 0.8% in December. This decline was mainly due to energy price developments. At the same time, the inflation rate in January 2014 was lower than generally expected . On the basis of current information and prevailing futures prices for energy, annual HICP inflation rates are expected to remain at around current levels in the coming months.
…
Turning to the monetary analysis, data for December 2013 confirm the assessment of subdued underlying growth in broad money (M3) and credit. Annual growth in M3 moderated to 1.0% in December, from 1.5% in November. Deposit outflows in December mirrored the strong sales of government and private sector securities by euro area MFIs, which, in part, could be related to adjustments by banks in anticipation of the ECB’s comprehensive assessment of banks’ balance sheets. These developments also affected annual growth in M1, which moderated to 5.8% in December but remained strong. As in previous months, the main factor supporting annual M3 growth was an increase in the MFI net external asset position, which continued to reflect the increased interest of international investors in euro area assets. The annual rate of change of loans to the private sector continued to contract. The annual growth rate of loans to households (adjusted for loan sales and securitisation) stood at 0.3% in December, broadly unchanged since the beginning of 2013. The annual rate of change of loans to non-financial corporations (adjusted for loan sales and securitisation) was -2.9% in December, after -3.1% in November.”
this is getting a bit crazy…
Petar that´s why I called it a “sick joke”!
You fight anemia with leeches, right?
I’m at a loss as to why EMU bond traders aren’t freaking out. This pair of graphs shows that it’s the Deutsche Mark show at the ECB. Moreover, Greek NGDP is still falling and Spain is flat lined. Italian NGDP is drifting lower since 2011. The Mediterranean economies are still in serious trouble and no one seems to care.
Justin. It’s not quite so simple. Spain is bottoming out, definitely. The internal devaluation has been achieved, at huge social cost, but pain is not worsening. They are optimistic there of flat RGDP in 2014, and modest growth on 2015. Deleveraging is beginning to come to an end. The cost of funding is falling. Distressed and other investors are flocking to pick up real estate. banks have been re-capped. Domestic bank shares have been flying for over six months. Investors think Italy is 6m-12m behind Spain. Both “big” peripherals see exports to Germany rising? France was a big worry, but Hollande has now started doing some big u-turns away from dirigiste socialism. And Draghi is still a huge improvement on iceman Trichet, like Carney over King. Of course, it could all go wrong with a modest demand shock from somewhere given the chronically low levels of growth, but it’s not so so bad as you think.
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