Economics

Since the financial crisis, the unwritten rule has been that bad economic news was good news for investors, as central-bank taps likely would be opened. And if a central bank talked more dovishly than expected in a meeting, the markets were quick to react and party.

Although they will only have 2-year maturities, the LTROs were already announced, so early that details are not even finalized yet. It was visibly considered necessary to send a strong message now.

Draghi essentially confessed to what everyone already knows - the European economy , after a short bout of strength in late 2017/early 2018 - is decelerating again.

Markets no longer believe in the ability of the ECB to raise its key rates in 2019 and the theme of the Japanization of Europe is coming back. A comparison with the Fed’s experience in recent years allows us to see more clearly.

“China is battling slowing economic growth with a host of stimulus measures, but a US policy of containment, the rise of rival low-cost manufacturing hubs and a dwindling current account surplus call for caution,” says Jason Pidcock, Head of Strategy, Asian Income.