ECB president Mario Draghi pulled out a bazooka today with a package  that allegedly exceeded expectations.

  1. QE goes from €60bn to €80bn
  2. ECB to buy corporate bonds
  3. ECB Cut the deposit rate to -0.4% from -0.3%
  4. The main refinancing rate fell by 5 basis points to 0 percent

The Financial Times reported “The euro dropped sharply in response to the package of measures – a clear sign that the central bank had manage to excel even aggressive expectations.”

Oops!

Second Thoughts

It’s not the news that matters, it’s the market’s reaction to it. The market had strong second thoughts.

Euro Whipsaw

That’s a huge 2.7% swing in about 3 hours.

So much for the bazooka theory. Is this a “clear sign” Draghi failed?

Mike “Mish” Shedlock