ECB Hints At Further Easing, Stocks Rally

While the European Central Bank left rates and policy unchanged, it was the comments from Bank President Mario Draghi that the ECB remains fully committed to further stimulus if needed to support the European economies. Draghi was unanimous in a commitment to use unconventional instruments within its mandate (if necessary) that sparked a rally in stock futures. The statement from the ECB: "At today's meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.05%, 0.30% and -0.20% respectively." Draghi stated that the ECB will soon start buying ABS, while saying he feels risks to the economic outlook remain to the downside. He also said that he is seeing indications toward lower revisions and forecasts. S&P 500 futures, which had been trading lower in front of the ECB decision, turned higher on the potential prospect for more easing from the ECB, although the aspect of slower growth has likely tempered that move. While QE has ended in the United States, the prospect of additional stimulus from Europe, combined with Japan's ongoing and expanding stimulus, is being perceived as a benefit for U.S. stocks, even with lowered GDP and earnings expectations.