Mario Draghi's big bazooka turns into a peashooter

The markets expected a lot more - an expansion of QE and deeper deposit rate cuts. Simply put, the ECB president failed to live up to his own hype

The currency markets and share prices spoke volumes. Financial markets waited for Mario Draghi to fire his big bazooka and when it became clear he was holding a peashooter instead, they bought the single currency and dumped stocks. The euro rose against the dollar and screens showing equity prices went red.

The reason for the reaction was simple: markets had expected a lot more. They had been looking for the European Central Bank to announce it was cutting its deposit rate from -0.2% to -0.4%, making it more expensive for commercial banks to hold deposits with the central bank. They got a cut to -0.3%.

Related: ECB dashes hopes of major QE expansion

Related: ECB's five options to boost eurozone economy