“Market expectations were too high.” This is the interpretation given by Credit Suisse analysts regarding the disappointment of the markets with respect to the new monetary policy measures announced yesterday by Mario Draghi. After the meeting of the European Central Bank which communicated its intention to extend the Quantitative easing program - judged by Draghi to be effective -, European lists collapsed downwards, losing almost all more than 2%.
According to the interpretation of the Swiss Bank, “the markets will have to adapt to a context in which central banks will no longer be able to give them the same support they have insured in the last five years”.
Yesterday Draghi announced the overnight deposit rate cut by 10 basis points (from -0,2 to -0,3%), with an extension of the Qe until March 2017 and the inclusion of local government issues in the basket of securities purchased.
Markets probably they expected more generous measures, "in particular a more substantial cut in rates on deposits and an increase in the amount of securities purchased each month by the ECB", which instead remained stable at 60 billion euro.
