While Bundesbank President Jens Weidmann has called on the European Central Bank (ECB) to end its bond buying programme, ECB President Mario Draghi is unlikely to use language that could potentially excite markets in his Jackson Hole speech this Friday, having been scarred by his recent experience at another central banking conference in Portugal, say analysts.
Bond yields and the euro surged following Draghi's remark at the Portuguese resort of Sintra in late June that "all the signs now point to a strengthening and broadening recovery in the euro area." The president's ECB colleagues were subsequently compelled to spend several days qualifying and walking back his comments to calm nervous traders.
President Draghi will, therefore, be mindful of saying as little as possible given that market reaction, Simon Derrick, chief currency strategist at BNY Mellon, told CNBC's Squawk Box on Monday.
"He's going to say nothing at Jackson Hole," opined Derrick, adding that this strategy may not, however, be enough to help with the ECB's concerns over the euro's recent buoyancy.
"I think unfortunately that probably does feed into euro strength but I think the market has to be aware that they really don't want that. So if you start to see a euro that's moving towards 1.19 or 1.20 that's going to change expectations about what they do at the next meeting," he continued.
Further indications that Draghi will stick to the script on Friday can be found in perfectly transparent recent messaging from the region's central bankers, according to Peter Chatwell, head of euro rates strategy at Mizuho.
"The ECB has been quite clear that there will be no change in policy stance until the next meeting. This has been communicated by Draghi himself at the last meeting and also on the ECB's twitter feed," noted Chatwell via an email exchange with CNBC on Monday.
"Moreover, the ECB took the unusual step of stating that Draghi's speech on Friday will be on the topic of the Symposium 'Fostering a Dynamic Global Economy,' he added, highlighting the central bank's board ambition to shift the focus on the president's speech to a broader agenda than the potential timeline for adjustments to regional monetary policy.