After the surprise announcement of the European Central Bank to cut the reference rate by 25 basis points to 0,25%, thus bringing the cost of money to an all-time low, the European stock exchanges, weak up to that moment, fly towards high. Piazza Affari, however, after an increase of around 1%, collapsed to -1,8%. Milan lost 0,6% in the mid-afternoon, while Wall Street, driven by the excellent result of the US GDP, opened the session on the upside in what has been renamed Twitter Day.
The spread was also affected by the announcement and the gap between the Btp and the German Bund dropped to 240 basis points. The differential had closed yesterday at 244 and this morning it had opened at 247.
Euro sharply down after the move by the Eurotower which lowered the marginal rate from 1% to 0,75%, leaving the one on deposits unchanged at zero. The EU currency falls to 1,335 against the dollar compared to 1,3507 before the cut (-1%). The pound also fell to 0,8312 from 0,841, the lowest since January. Against the yen it is at 132, against 133,3 prior to the Frankfurt decision.
Three quarters of an hour after the closure, Piazza Affari loses 1,6%.
