Never miss a story from James Stanley

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to James Stanley

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

ECB Cuts All Three Rates and Increases QE by €20 Billion a Month

The European Central Bank announced this morning that they would cut all three of the benchmark (to zero), marginal lending (also to zero) and deposit rates (to -.4%); along with a larger than expected increase to the bank’s monthly bond purchases by €20 Billion per month. This brings the monthly tally of ECB bond purchases to €80 Billion per month, and the bank also announced that they would buy non-bank corporate debt as part of their asset purchases. The new policies and updated rates go into effect on March 16th.

The immediate impact on the Euro has been significant weakness. EUR/USD is off by over 150 pips from the pre-release high, and EUR/JPY has moved lower by over 100 pips. The immediate impact for stocks has been positive, as most European indices have caught a strong bid after this announcement. The Euro is continuing to move lower with aggressive price action as we approach the press conference at 8:30 AM ET.

We had discussed some of these setups and scenarios yesterday in the article, EUR/USD, Euro Stocks Primed for ECB: Will Draghi Deliver? The chart below shows the DAX, and as we can see from this Daily setup, this news has been warmly received by equity markets:

ECB Cuts All 3 Key Rates, Increases QE by EUR 20B per month

Created with Marketscope/Trading Station II; prepared by James Stanley

From the looks of markets thus far after the announcement, Mr. Draghi and the European Central Bank have delivered in a very big way.

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX