The European Central Bank is leaving its refi rate unchanged at 1.00%. Perhaps the larger issue is what will be said by Mario Draghi later this morning at the ECB press conference. If you have been watching the ticker tape over the last five weeks this rate decision by the ECB might have given you a near certainty that the Europeans needed to cut their interest rates. The reality is that Dow Jones signaled recently that only eight of its forty-nine economists polled believed that a rate cut was coming from the ECB.
Perhaps the Europeans decided to look at what the zero percentage rate has done for the United States and Japan. Perhaps the ECB has another bag of tricks that it will use to shore up its banks. Perhaps Nero just wants to let Rome burn.
Now the hope will be that Draghi will hint that rates could be cut at the next date in July, or maybe that the ECB will step in with more loans and guarantees for the banking giants that are under so much pressure.
The Euro was under $1.25, the German DAX was up over 1%, and S&P Futures were up just over 11 points on last look.
JON C. OGG