Source: Zero Hedge
“Something odd is taking place in the market today: the world’s biggest central bank – whose balance sheet is 40.5% of Europe’s GDP – unveiled massive monetary easing in the form of new carry-trade facilitating bank loans and an extended NIRP period and… stocks tumbled, a reaction which the market has rarely even seen before in the context of a central bank unveiling a surprisingly dovish move….Dow futures immediately tumbled 250 points from its post-Draghi highs….Why the unexpected reaction, one which suggests central banks may now be losing control over markets having pushed on a string just one attempt to push stocks too far, a reaction which a trader at a major trading desk laid out simply as ‘this is bad.’….Meanwhile, the broader picture is even more bank adverse due to the extension of Europe’s NIRP period, which as Deutsche Bank made very clear in the past 5 years, has crushed bank earnings: ‘The interpretation of today’s measures is negative as low rates for longer hurts a lot banks’ margins,’ said Nuria Alvarez, bank analyst at Renta 4.”
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