Mixed reaction to latest ECB stimulus

London

European markets are on roller coaster as participants attempt to absorb the implications of Mario Draghi's further monetary stimulus.

After the euro slumped initially and stock and bonds surged, they fell during the European Central Bank (ECB) president's press conference on Thursday and then rebounded on Friday.

The ECB's monetary ease included a 20 billion euro boost to 80 billion euro (S$122 billion) a month eurozone sovereign and corporate bond purchasing programme, known as quantitative easing (QE); a widening of its negative interest rates or effective tax on bank reserves at the central bank; other rate cuts and a subsidised for year loan programme to encourage banks to lend. The move first boosted the markets and caused the euro to fall and then the markets reversed swiftly when Mr Draghi indicated that rates would not decline further in the rest of the year. On Friday, the markets revived on hopes that the ECB's massive monetary bazooka would at last spur the slack eurozone economy. Despite previous ECB QE, it remains mired …