Sean Callow, analyst at Westpac, points out that on Tuesday, markets were very surprised by ECB president Draghi’s declaration that additional stimulus will be required unless there is improvement in risks such as geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets.

Key Quotes

“Not only did Draghi mention cutting interest rates but he even suggested restarting the bond purchase program financed by money creation which was halted last December.”

“This was particularly surprising coming less than 2 weeks after the ECB meeting which was not overly dovish.”