ECB president Mario Draghi's announcement today regarding more QE fell far short of the sky-high expectations of market participants.
Draghi Recap
Japanesque Announcement Not Enough
Somehow that was not enough to excite the market. Here's an amusing quote courtesy of the Financial Times.
“The ECB delivered at the very low end of expectations,” said Andrew Balls, chief officer for fixed income at Pimco. “There wasn't much to get excited about . . . markets were expecting an increase in the monthly purchase size.”
Further negative interest rates were “nothing to get excited about”. Apparently the only thing that would have satisfied Balls would have been an announcement the ECB would purchase still more European public debt securities.
Why not just buy them all and get it over with? Japan is effectively there right now.
Market Response
US Dollar 15-Minute Chart
After surging yesterday to a high last seen in March of 2003, the dollar index pluinged 2% over the course of four hours today.
US 10-Year Treasury Yield 15-Minute Chart
More, More, More
The markets are clearly hooked on easing, always demanding more, more, and more. Japanesque announcements are simply not enough, nor are below zero interest rates to the tune of -0.3 percent.
Good luck with that.
