Markets go into reverse despite ECB cutting rates and boosting QE - as it happened
The European Central Bank has thrown the kitchen sink at the eurozone, by slashing the headline interest rate to zero and increasing the bank's money-printing programme
- Summary: ECB cuts interest rates, but euro actually rises
- Growth and inflation forecasts cut
- ECB to pay banks to lend money (!)
- Draghi press conference <- highlights start here
- Q&A: What has the ECB done, and why?
5.51pm GMT
A surge in stock markets and a slump in the euro as the European Central Bank announced its new stimulus measures soon went into reverse after the central bank's president Mario Draghi suggested that might be all there was.
With another slide in the oil price as hopes of a meeting of producers to tackle the glut began to fade again, it ended up being a volatile day for investors. So markets suffered turnarounds of several hundred points, and the euro saw a more than 3% jump from its lows to its highs against the dollar.
What a mad world. Euro jumps above $1.12, after hit day lows at $1.0822 pic.twitter.com/D2QVLnJAKi
5.42pm GMT
#Draghi just made a huge mistake signaling that the #ECB's super-quant move today is the end of "whatever it takes." a rally is big problem.
5.38pm GMT
The eurozone needs reforms and fiscal measures alongside the ECB's stimulus package if its economy is to recover, argues our economics editor Larry Elliott:
For most of its short life, the European Central Bank fretted about inflation being too high. Now it has the opposite concern.
The fear of deflation explains the package of measures announced by Mario Draghi on Thursday. Three months ago, the ECB president disappointed the markets by coming up with less stimulus than he had led them to expect. This time there were no half measures.
Related: ECB can only buy time, not solve eurozone growth woes
5.31pm GMT
So Draghi and the ECB join the Kuroda Bank of Japan club where you cut interest-rates and your currency soars! #QE #Euro
4.44pm GMT
Mario Draghi shot down his own bazooka, suggests Philip Shaw at Investec:
The announcement of the package resulted in a significant fall in the euro (by a cent and a half to $1.0825) and a rally in stocks and bonds. However this was more than reversed when Mr Draghi hinted that rates may have hit the bottom. Indeed he explained that another reason for avoiding a tiered structure was so not to signal that rates could go as low as the ECB wanted. To us this is the worst of both worlds - taking the deposit rate further below zero but with verbal interventions unwinding positive market effects.
Overall we welcome the ECB's willingness to act to bolster the recovery and to help to achieve its 'below, but close to 2%', inflation target. The package of measures is certainly substantial. However we remain wary of the 'unintended consequences' on the banks arising from negative rates.
4.41pm GMT
As well as the volatility after the ECB announcement, markets have also been rattled by another slump in the oil price, as reports cast doubt on whether a meeting between producers later this month would go ahead.
Opec and other producers were expected to meet in Russia on March 20 amid a glut of supply and falling demand which has put severe pressure on the crude price. But with Iran reluctant to join a proposal to freeze output at January's levels, Reuters is reporting that the gathering in Russia may not take place.
4.39pm GMT
Despite the day's surge in the euro after the ECB meeting, Capital Economics still reckons it will fall back against the dollar, mainly because the US Federal Reserve is on the path of raising interest rates. The research group said:
The euro's resilience in the face of greater-than-expected stimulus from the ECB does not alter our view that the currency is likely to fall towards parity against the dollar later this year. This is because that view has been, and continues to be, primarily driven by our forecast that the Fed will tighten policy much more aggressively than anticipated by the average investor.
Although the euro initially slid to around $1.085 in response the announcement of greater-than-expected stimulus from the ECB, the currency subsequently rebounded as Mario Draghi suggested in his press conference that he did not envisage interest rates being cut even further. Indeed, at the time of writing, the euro was actually stronger against the dollar (about $1.115) than before the stimulus was communicated....
4.38pm GMT
By 'throwing the kitchen sink' at the eurozone's problems, the European Central Bank may have moved closer to the point where it has to actually start showering cash on the economy.
So argues George Magnus, an experienced City voice who used to be head economist at UBS.
So is the ECB's arsenal now bare? If it sticks to the general approach to policy it has currently then yes. But, though this is inconceivable as thing stand, there are things the ECB could theoretically do. It could take us towards Milton Friedman's "helicopter money." This would involve the ECB taking a more direct role in creating money that might be distributed directly to households, companies and banks, for example by buying loans from banks, or public debt directly from governments, or financing cash distributions in the form of tax cuts or investment allowances.
These ideas will remain the subject of idle chatter for the time being. But eventually, who knows? If today's kitchen sink episode ends with a whimper, as seems likely, and governments continue to stand aside from the economic fray, Europeans may demand still more of their central bank.
Here's my take on ECB's rather fruitless day. https://t.co/wy83RXLGcy
4.26pm GMT
On the same theme Jasper Lawler, market analyst at CMC Markets, said:
Draghi did the hard work of convincing an apparently divided group of European central bankers that a bazooka was needed but committed the cardinal central banker sin of signalling a possible end to what is essentially an open-ended program.
4.17pm GMT
The markets are blowing a loud raspberry towards the European Central Bank headquarters.
The ECB president managed to trip himself up in the press conference Q&A session.
4.01pm GMT
Ian Kernohan, economist at Royal London Asset Management, says today's package of ECB measures is a solid reaction to the recent economic downturn.
The markets may be volatile now, but the verdict of the real economy is what matters.
"Having been stung in December by disappointing market expectations, it was important that Mr. Draghi did not make the same mistake twice. Since then, we have seen a major spike in financial market volatility, a fall in Eurozone inflation, some weakness in the main Eurozone business surveys and cuts to global growth forecasts.
"Today's announcement more than met expectations for policy easing, with a cut in the refi and deposit rates, a a20bn increase in monthly QE purchases, purchases of corporates bonds, and a new Long Term Refinancing Operation (LTRO) arrangement. The addition of non-bank corporate bond purchases and the new LTROs, where borrowing can be as low as the deposit rate, were perhaps the main surprises.
3.57pm GMT
Here's some market reaction from Reuters:
Giuseppe Sersale, fund manager at Anthilia Capital, said Draghi's remarks that more rate cuts were unlikely caught investors, who were heavily selling the euro by surprise.
"However, regardless of the short term reaction, we see the stimulus package as very important," he added.
EUR ping-ponging around isn't all that relevant, given that the latest measures are aimed at the credit, rather than the FX channel.
3.53pm GMT
David Lamb, head of dealing at FEXCO Corporate Payments, believes that the eurozone's battle against deflation has just replaced Brexit as the biggest issue in Europe.
Here's his take on today's package of fresh measures:
"The man who once shared a nickname with a pixellated plumber has thrown the kitchen sink at stimulating the Eurozone economy. Super Mario has morphed into Drastic Draghi.
The scale and duration of the ECB's money printing programme alone would have been enough to prompt a big intake of breath from the markets.
3.38pm GMT
2016 so far: markets don't like negative rates. Nor do they like the idea that rates will not get more negative.
3.31pm GMT
Mario Draghi didn't look too happy as he left today's press conference:
3.23pm GMT
Mihir Kapadia, CEO of Sun Global Investments, has warned that investors may not be convinced by this latest eurozone stimulus plan.
"Today's bold announcements by the ECB was a far more extensive programme than what was expected, and just shows the immense pressure on Draghi to demonstrate the ECB has got to grips with what is an increasingly worrying economic picture.
The stimulus should theoretically boost economic activity, however investors are understandably reluctant about making this presumption given low global growth, global deflationary pressures and poor demand for credit in Europe."
3.19pm GMT
Mario Draghi's statement is now online:
3.12pm GMT
There is a "strong argument" that the ECB has fired its bazooka today, says Christopher Vecchio, currency analyst at DailyFX.
He adds that the new measures to boost bank lending should help the eurozone's struggling periphery:
Considering that only four Euro-Zone countries are on the wrong side of the net-borrowing/lending equation vis-i-vis the European Central Bank and National Central Banks (per Bank of Spain and Wall Street Journal), these new measures are most likely going to help reduce financial credit risk in Italy, Spain, Greece, and Portugal more than anywhere else."
3.08pm GMT
Bank shares are soaring following the news that the ECB will give them ultra-cheap loans:
peripheral banks...greek, spanish, italian...still outperforming as @ecb expands bond buying&includes corporate debt pic.twitter.com/rNc9AVV9Zp
3.08pm GMT
So, a quick recap.
The economic recovery in the euro area continues to be dampened by subdued growth prospects in emerging markets, volatile financial markets, the necessary balance sheet adjustments in a number of sectors and the sluggish pace of implementation of structural reforms.
Draghi: If we had not acted in recent years, the counterfactual would have been a disastrous deflation
2.48pm GMT
Our City editor Jill Treanor has written a Q&A explaining what the ECB has announced today, and why:
Related: How the ECB is trying to revive the eurozone
2.44pm GMT
And finally, Draghi insists that the eurozone is not in deflation (even though prices are currently falling).
Draghi: "We are not in deflation". Prices fell 0.2% Feb, will be negative for months more, ECB thinks. So what does he mean by "deflation"?
2.39pm GMT
Draghi then repeats his statement that the ECB doesn't expect to cut interest rates again, and emphasises that the facts could change.
Has someone slipped him a note about the soaring euro?
Draghi re-reading his prepared question on cutting rates further with more emphasis on the caveat this time.
2.37pm GMT
Q: Could the ECB consider 'helicoptor money' if the new measures announced today don't have their necessary effect?
Draghi replies that the idea is "interesting", and being studied by academics but the European Central Bank "hasn't really studied the concept yet".
#Draghi does not exclude helicopter money, rather he defines it as an "interesting concept", which they have not studied as yet.
"We haven't thought or talked bout helicopter money" aa
2.34pm GMT
The wild swings in the euro in the last 90 minutes show that the markets really aren't sure what to make of today's announcements.
#EUR torn between #Draghi shock and awe and his comment that "no further cuts anticipated". #EburyChat16 pic.twitter.com/MlXvCVyzWK
2.28pm GMT
Draghi has also insisted that the ECB can't simply wilt in the face of low inflation and weakening growth:
Draghi: If we were to give up, we would have deflation which increases the real value of debt
2.28pm GMT
Q: Given that the fall in inflation is mainly due to cheaper oil, hasn't the ECB over-reacted?
No, Mario Draghi insists. The global economic picture has worsened since December, and financial conditions have changed considerably since
This isn't an over-reaction to the oil price. It is an adequate reaction to the weakening in the growth and price stability prospects.
2.25pm GMT
Francesco Papadia, a former director general for Market Operations at the European Central Bank, tweets that Draghi may have undermined his own stimulus programme:
Do the statements of #Draghi that rates cannot go further down reduce the effects of the package of measures? Watch the a exchange rate.
2.22pm GMT
Presumably today's decision was NOT unanimous, otherwise Draghi would have said as much.
#draghi Not unanimous but "overwhelming"
2.20pm GMT
Draghi: The majority in favour of this package has been overwhelming
2.20pm GMT
2.19pm GMT
Q: Did the European Central Bank's governing council unanimously support today's decisions?
Draghi replies that the majority in favour has been 'overwhelming'.
2.16pm GMT
Oh. Dear.
The euro has reversed its early fall and is now UP 1% against the US dollar.
$1.11 What the actual F? pic.twitter.com/xJOWqX8On0
2.13pm GMT
Tomas Holinka, economist at Moody's Analytics, says the ECB has launched a "broad attack" on the eurozone weak inflation rate, by using all the tools at its disposal.
He says it will unleash up to a800bn of commercal bank reserves, which is currently locked up in the ECB's electronic vaults:
While the bank has revealed its policy instruments step by step in the past, now it announced all of them-cutting the interest rates, expanding the QE program and providing long-term liquidity-together.
This massive easing package should release as much as a800 billion parked at the ECB's deposit facility and reserves, increasing inflation closer to the ECB's target through higher lending and a weaker euro.
2.07pm GMT
Reinhard Cluse, chief European economist at UBS, says the European Central Bank has 'over-delivered' today.
The ECB delivered a stronger-than-expected policy response today. We were on the dovish side of expectations anticipating a large increase in QE and the inclusion of corporate bonds within the ECB's asset purchase spectrum.
However, the decision surpasses our dovish expectations.
2.02pm GMT
The euro has bounced back, after Draghi said that the ECB doesn't anticipate cutting interest rates again (although you never know).
$EURUSD oops - pic.twitter.com/p3kPOyuJdK
That sound you hear is EURUSD shorts throwing their computers out of the window
1.59pm GMT
Draghi says the decision to impose negative interest rates on eurozone banks has worked well.
He claims it has not hurt the banking sector overall (despite analysts arguing that it has hurt profitability)
Draghi: The experiences we had with negative rates have been very positive
1.57pm GMT
Onto questions.
Q: How low can the ECB's interest rates go?
1.55pm GMT
#Draghi appealing for increased infrastructure spending and structural reforms in "majority of Eurozone countries".
1.54pm GMT
Draghi ends his statement by urging eurozone governments to use the window of opportunity provided by the ECB to reform their economies.
The "majority of euro area governments" need to speed up their efforts, he says.
*DRAGHI: REFORM EFFORTS MUST BE STEPPED UP IN MOST EURO NATIONS
So, now #Draghi presents the expected government bashing. ECB dilemma, however, is that it always buys time which is not used properly.
1.52pm GMT
New ECB staff projections, much lower than I expected. pic.twitter.com/knR0sK3ibY
1.49pm GMT
#ECB now expects euro-area inflation to reach 1.6% in 2018. Quite far away from the official "below, but close to, 2%" mandate.
1.48pm GMT
The euro has fallen to its lowest level in six weeks against the dollar, down 1.6% on the day to $1.0825.
1.48pm GMT
The ECB has lowered its growth forecasts, Draghi says.
He blames lower global growth prospects, and cautious that risks are now to the downside (never a good message).
Draghi: Annual real GDP to increase by 1.4% in 2016 [from 1.7% in Dec], 1.7% in 2017 [unchanged from Dec] and 1.8% in 2018
Draghi: Annual HICP inflation at 0.1% in 2016 [from 1.0% in Dec], 1.3% in 2017 [from 1.6% in Dec] and 1.6% in 2018
1.45pm GMT
Interest rates are going to stay at their current record lows, or lower, for a long time, says Draghi:
Draghi: Governing Council expects the key ECB interest rates to remain at present or lower levels well past horizon of net asset purchases
1.43pm GMT
Some reaction to that last point:
The ECB is willing to pay banks to borrow from it provided they lend to the economy.
How to inflate a credit bubble.. https://t.co/dKK5lJWnsv
1.42pm GMT
Mario Draghi also confirms the ECB will launch four new refinancing operations - offering extremely cheap four-year loans to banks.
He also confirms that these loans could be as cheap as the ECB's deposit rate, which has been cut to minus 0.4% today. As explained earlier, that means the ECB will be paying the banks to lend them money (!).
1.41pm GMT
Draghi has a small surprise - the ECB will now buy up to 50% of a particular bond type though its QE programme (previously it was limited to 33%).
That wasn't in the official release: #ECB raises issue share limit on QE bonds to 50% from 33%. Another QE parameter tweaked.
1.39pm GMT
Draghi: Purchases of corporate bonds will start towards end of Q2 @CNBCi
1.38pm GMT
1.38pm GMT
Draghi begins by says the ECB governing council has conducted a 'thorough review' of the monetary situation in the eurozone.
And that's why it has drawn up today's "comprehensive" group of policies, he continues.
1.35pm GMT
ECB president Mario Draghi has arrived. He'll read out a prepared statement, and then take questions. There will be lots, we promise.
1.30pm GMT
Mario Draghi is about to give a press conference to explain the European Central Bank's decisions.
You can watch it live here. I've also embedded it in the top of this liveblog - just click the play button.
1.30pm GMT
The European Central Bank has cut interest rates in the eurozone to zero, expanded its money printing programme and reduced a key deposit rate further into negative territory as it seeks to revive the region's economy and fend off deflation.
Going further than economists had expected, the ECB cut the eurozone's main "refinancing" rate from 0.05% to zero, prompting a sharp drop in the euro against the dollar.
1.23pm GMT
The ECB just lifted "at least parts of a white rabbit out of the hat" today, by slashing interest rates and boosting its bond-buying programme, says Carsten Brzeski of ING.
But he also questions whether it will work:
That was the maximum that the ECB could do, but it will do little to remove doubts about the impact of these measures.
1.20pm GMT
European stock markets are soaring, as traders salivate at the prospect of more money pouring into assets from the ECB.
The French CAC index has leapt by over 3%, with Germany's DAX not far behind.
1.14pm GMT
Alexandra Russell-Oliver of foreign exchange company Caxton FX says the ECB has exceeded expectations today.
ECB President Draghi announced more stimulus measures than markets had expected, including a cut to benchmark interest rates from 0.05% to 0.00%, weakening the euro.
1.10pm GMT
The ECB has also announced a new long-term bank lending programme, called a TLTRO.
It will run for four years, and allow eurozone banks to borrow cheaply from the central bank.
This is important for all the NIM worriers. (and means @ecb will Pay Banks to Borrow its money) pic.twitter.com/ZhTOwaJn6w
The negative rate on TLTROs should compensate for the extra costs of negative depo rate. Genius.
1.07pm GMT
Wow...Draghi taking full advantage of Weidmann being a non-voter this month!!
(As part of the ECB's rotating voting policy, the hawkish Bundesbank president Jens Weidmann had no say at today's meeting.)
1.06pm GMT
Andrew Sentance, a former Bank of England policymaker, says the ECB is close to the limits of central bank policymaking:
Zero interest now in the euro area: https://t.co/3OsYNaNRnm. Monetary policy being pushed to the limits ... and beyond!
1.04pm GMT
Some instant reaction from the Reuters news agency:
ECB deploys its latest policy tool: pic.twitter.com/pSFD2m9qNo
1.03pm GMT
The ECB is also widening the scope of assets that it will buy through its QE programme.
It will now buy investment-grade corporate bonds, on top of the government debt it has been buying with newly minted money for the last year.
1.02pm GMT
The pound has surged against the euro, to a1.3055.
That means one euro is worth 76.5p, down from 77.5p before the announcement.
12.59pm GMT
Mario Draghi and the ECB has surprised the market with the cut to zero for the headline interest rate, says David Morrison, senior market strategist at Spread Co:
The ECB cut their headline minimum bid rate to zero from 0.05%. This has taken the market by surprise as we can see from the sharp sell-off in the euro. In addition the ECB have cut their deposit rate by another 0.1% to take it to 0.4% and increased the monthly bond purchases by a20 billion. So Mario Draghi has fired the big bazooka and given the market what it wanted and more. It now remains to be seen if this has a lasting impact on risk assets and if the euro will continue to slide.
12.56pm GMT
The euro has plunged as investors react to the ECB's decision to cut interest rates and boost its QE programme.
12.49pm GMT
BREAKING: The European Central Bank has cut the interest rate across the eurozone to a new record low of zero.
That's a big surprise; the rate was previously 0.05%.
12.45pm GMT
NO MORE BETS pic.twitter.com/nbj5EgI8l8
12.41pm GMT
Just five minutes to go! And the euro is weakening a little, suggesting investors are expecting fresh action from the ECB.
#euro slipping lower into the #ECB decision #forex
12.34pm GMT
For today to be a success, Mario Draghi needs to reassure investors that the eurozone recovery will continue.
So argues Ipek Ozkardeskaya of London Capital Group in her latest research note.
Today is all about Draghi's capacity to convince the market that additional measures could foster the economic recovery and eventually generate inflation.
12.20pm GMT
Here's the scene inside the ECB's headquarters in Frankfurt:
#ECB press office slowly filling up. Is something up? I and @jeannasmialek are here to tell you the story pic.twitter.com/2K0H8Nl6jY
12.16pm GMT
City traders will be scrambling to the local sandwich shop before the ECB interest rate decision arrives....
30 minutes to ECB rates decision.
12.16pm GMT
Central bankers never admit they're fighting a currency war. But Mario Draghi does have a good opportunity to weaken the single currency today.
Kit Juckes of Socii(C)ti(C) Gi(C)ni(C)rale says:
I think the ECB has an opportunity to push the Euro lower and fight back against deflation. Market positioning is light and sceptical....
12.04pm GMT
Markets would be particularly impressed if the ECB widened its asset purchase scheme today to buy corporate loans and other risky stuff.
That's according to a survey by Bank of America Merrill Lynch, here:
BofAML survey on what policy measures today could surprise investors pic.twitter.com/2habn3FiIy
With German bond yields negative out to 8 years, what else can the #ECB buy?https://t.co/yAPl7FlQ9E pic.twitter.com/2lXMkNXwk8
12.00pm GMT
Thank goodness we have gifs to keep us entertained before Mario Draghi appears.
https://t.co/AEqdhm5b9u Initial shots of ECB bazooka released pic.twitter.com/SV0UyKxJul
11.45am GMT
One hour pic.twitter.com/Pumz0EmoPX
11.45am GMT
This is your 60 minute warning..... just one hour to wait until the ECB reveals whether it has cut interest rates at this month's governing council meeting.
Any other measures may have to wait until Mario Draghi's press conference, 45 minute later.
11.18am GMT
Wow. Ireland's economy grew by a blistering 7.8% last year.
New figures released by Dublin show that Ireland was the best-performing EU country in 2015, for the second year running.
Ireland. 7.8% real GDP growth last year.
Seven. Point. Eight.
Irish Q4 GDP +9.2% yoy. GNP more important to Irish, but still up 5.2% yoy, amazing 13.6% quarterly annualised
Is Ireland an emerging market? It grew nearly 8% last year!
10.57am GMT
For all the talk of 'super' Mario Draghi, the ECB president cannot fix all the eurozone's woes.
His job, really, is to keep the monetary system working while Europe's elected leaders make the tough decisions.
European govts, not Draghi, hold the key to growth - @Simon_Nixon in today's @TimesBusiness https://t.co/6IN0mUdFGe pic.twitter.com/YaoRMBmybr
10.47am GMT
Olivier Blanchard, the former chief economist of the IMF, has said the ECB should launch fresh stimulus measures today to stimulate growth.
He's telling Bloomberg TV that the recovery in Europe is too slow.
*BLANCHARD: MORE ECB STIMULUS IS RIGHT SIGNAL, EURO-AREA ECONOMIC RECOVERY TOO SLOW @ojblanchard1 @PIIE_com @tomkeene @flacqua
*BLANCHARD SAYS NEGATIVE RATES INTERFERE WITH BUSINESS OF BANKS @ojblanchard1 @PIIE_com @tomkeene @flacqua https://t.co/Ng2PG7JNIF
10.25am GMT
European stock markets have dipped this morning, as investors brace for the ECB decision at 12.45pm GMT.
This is seen as an opportunity for President Mario Draghi to redeem himself by putting his money (Germany might say otherwise) where his mouth is and deliver the boost to QE that markets were left wanting for in December.
10.13am GMT
Germany's Handelsblatt newspaper has already fired a warning shot at Mario Draghi.
They fear he is endangering Germans' hard-earned savings by hitting banks with negative rates, and by printing more money through QE:
Today's @handelsblatt already knows tomorrow's story: "#Draghi's dangerous game with German savers' money"#ECB pic.twitter.com/tzXIkjwbOI
10.02am GMT
Ilya Spivak, currency strategist at DailyFX, says the euro will soar and shares will slide if Mario Draghi fails to deliver today:
Markets envision at least a 10 basis point reduction [to the deposit rate paid by banks].
If the ECB does not meaningfully exceed their expectations and offer a tangible boost to the size of QE asset purchases, another disappointment is likely.
9.47am GMT
The European Central Bank began its quantitative easing programme a year ago.
Since then, government bond prices have hit record highs, as traders knew they could sell them onto the ECB. Shares, though, have lost ground - hit by global economic concerns, the Greek debt crisis, and even the Volkswagen cheating scandal:
ECB vs Rest of the World, round 3
starting in just a few hours...https://t.co/w7bAwlN2Xv pic.twitter.com/2atH7SmmCe
9.34am GMT
Canadian bank RBC have listed four reasons for the ECB to launch fresh stimulus today:
9.28am GMT
Some City analysts are worried that the ECB may under-deliver today.
French bank Socii(C)ti(C) Gi(C)ni(C)rale predict that that bank deposit rates will be slashed from -0.3% to -.0.5%, but fear that Draghi's warchest is running dry:
We expect the ECB to cut the deposit rate by 20bp with some tiering.... There are other options such as a corporate bond purchase programme or expanded collateral eligibility, but these would have limited economic effect
Our main concern is that, whilst the bank will continue to signal its willingness to do whatever it takes, we think the ECB is approaching the effective limit of what it can do.
The ECB is at risk of underwhelming markets by virtue of German intransigence and market over-optimism regarding depth of measures.
Remember Weidmann can't vote today. Advantage #Draghi? Not so sure: the #ECB rarely votes. It's all about consensus. pic.twitter.com/N8YuEuJpmF
9.02am GMT
Expectations of a rate cut have already hit the euro, as Bloomberg explains:
The euro is the world's worst-performing major currency over the past month with traders bracing for the European Central Bank's decision on whether to expand stimulus.
The single currency has depreciated close to 3 percent against the greenback since Feb. 10 as economists forecast the ECB on Thursday will cut its deposit rate from minus 0.3 percent and step up its 60 billion-euro ($66 billion) monthly bond-buying program.
8.50am GMT
Another great chart, showing how the markets have absolutely certainty that the ECB will slash the bank deposit rate again today.
Two months ago, it was a 50-50 shout, before market turmoil and weak inflation drove up the odds to 100%.
Chart of the Day pic.twitter.com/NmH8aaRQie
8.49am GMT
This is a great chart, showing City economists' expectations for today's meeting.
Expectations for today's ECB meeting are high, but without consensus pic.twitter.com/7psqOvIciG
Four hours to go!
8.44am GMT
The ECB could decide to scrap the deadline on its QE programme (currently March 2017).
It could simply pledge to keep buying assets with newly created money until inflation is back on track, as the Resolution Group's Duncan Weldon points out:
Quick glance at those expectations suggests the "easy surprise" is to move timing of QE away from calendar and "until CPI is near 2%".
8.42am GMT
Capital Economics reckons Mario Draghi needs to announce something big today.
They are calling for a 20 basis point cut in the deposit rate (to minus 0.5%) and a20bn of extra quantitative easing each month.
The ECB has signalled a further loosening of monetary policy at its forthcoming meeting on 10th March.
And while December's under-deliverance highlights the risk of another disappointment, the deteriorating economic outlook should persuade the Governing Council to be bolder this time.
Massive day for the #ECB. 20bp rate cut plus 20bn rise in monthly QE needed to get ahead of curve. Our ECB Watch: https://t.co/p8x6l74wDH
8.30am GMT
The ECB is also expected to downgrade its growth and inflation forecasts today - another reason for fresh action.
But Stefan Schneider, chief international economist at Deutsche Bank, argues that some economic conditions are actually improving.
The expectations are that Draghi has to deliver something, but we don't think it will be a dramatic move.
8.19am GMT
European bank chiefs are already quietly fuming about the prospect of deeper negative deposit interest rates being announced today.
Bankers hate negative deposit rates (which they pay to the ECB) because they can't pass them onto consumers. If they did, savers would simply withdraw their money and put it under the mattress.
Andreas Treichl, chief executive of Austria's Erste Bank, told the Financial Times that another cut could encourage financial bubbles, hurt economic growth and create "social disparity" by penalising savers.
Josi(C) Garcia Cantera, Santander's chief financial officer, added that the banks that would take the biggest hit to their profits if rates were cut again were those least able to bear it.
Just published: front page of the Financial Times UK edition for March 10 pic.twitter.com/HgcMW40Zvr
8.07am GMT
Here's a list of options which Draghi and the governing council will be pondering in Frankfurt right now:
7.42am GMT
Good morning.
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