* All eyes on bond-buying hints from ECB chief
* ECB likely to hold fire for now
* Fed to stay on hold, too, awaiting data flow
Mario Draghi may not need to show his money this week, but impatient markets will be unforgiving if the European Central Bank chief does not flesh out his dramatic promise to do whatever is needed to save the euro.
Given the threat that the long-running euro zone crisis poses to the global economy, Thursday's ECB policy-setting meeting and subsequent news conference were always going to be important.
But they have become pivotal since Draghi vowed in London last Thursday that "within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."
Specifically, Draghi said the ECB had a mandate to act if diverging borrowing costs were disrupting the transmission of monetary policy across the 17-country single currency area.
This is patently the case. The ECB's interest rate cut on July 5 to 0.75 percent has failed to reduce the giddily high cost of money for governments, banks and companies on the rim of the bloc, notably Spain and Italy. Sovereign yields in Germany and the Netherlands, by contrast, are negative.
Yet even as capital flees the periphery and euro zone output shrinks, few economists think Draghi is ready to announce that the ECB is resuming secondary-market bond purchases to lower yields, a policy it has pursued in the past with limited success.
Read more: http://in.reuters.com/article/2012/07/30/economy-global-weekahead-idINL6E8IS2F720120730
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