Stubbornly high euro zone inflation data on Monday reinforced money market bets that the European Central Bank, under the direction of new chief Mario Draghi, will wait until December to cut interest rates. That sentiment was echoed by Keith McCullough, CEO of Hedgeye Risk Management.
Draghi, who takes office as the new ECB president on Tuesday, will hold his first meeting and press conference Thursday, and investors will be looking for signs that the ECB is considering cutting interest rates and that it will continue its program of buying the bonds of troubled eurozone nations, especially Italy and Spain.
"He ultimately has to cut, just not on Thursday," McCullough said.
"The pressure on him is going to be huge," McCullough said. "There's a big difference between Trichet, who's managing his political career risk, or at least how history looks upon him ... but Mario Draghi is going to be very much politicized. I think the heat's not going to be on him to do it Thursday, but shortly thereafter."
Watch the video for more of McCullough's insights: