Policy was not meant to address market expectations – Draghi

In addition, the SPDR S&P 500 ETF (SPY) fell 1.4%, and the Energy Select Sector SPDR ETF (XLE) fell 2% on December 3, 2015. More radical options under discussion included the purchase of corporate debt or a split deposit rate that would punish banks parking too much cash with the central bank, sources told Reuters earlier.

The European single currency fetched$1.0575 Wednesday at the European close from $1.0634 in late United States trade on Tuesday. It had fallen to a 7-1/2 month low of $1.0523 on Thursday before jumping to as high as $1.0981 after the ECB’s measures were announced.

REACTION: The ECB’s announcement caused the euro to jump against the dollar, moving up almost 2 percent to $1.0801.

While traders, investors and analysts are blaming European Central Bank’s (ECB) communications over its intention, after the bank fell well short of market expectations, resulting in seventh biggest Euro move since its creation (3%), ECB vice-president Victor Constancio blamed market expectations.

For Hughes, a cut in the discount rate or more QE “will see the data take centre stage as investors await something to drive EURUSD (the euro against the dollar) even further lower”. This time round, regardless of the increase of stimulus, the market has been left wanting more.

“There can be little doubt that the European Central Bank will press ahead with further stimulus at its December meeting on Thursday”, added IHS Global Insight economist Howard Archer.

The expected rise in USA rates and slowing Chinese demand failed to dent copper, which looked like snapping a seven-week losing streak. It was the total opposite of what many traders and strategists anticipated would happen. French 10-year yields rose 0.17 percentage points to 0.96 percent, also a substantial move. Draghi said Friday, Dec. 4 the bank is ready to expand its economic stimulus program if need be, just a day after the bank’s surprisingly modest steps to shore up the region’s economy sent shudders through global financial markets.

“The euro’s adjustment higher is not yet complete and even a strong USA payrolls number exceeding consensus should not put euro under meaningful pressure”, Morgan Stanley said in a note.

At the ECB’s last monetary policy meeting of the year, the governing council chose to lower the key deposit rate, already in negative territory, to minus 0.30 percent. Brent crude, which is used to set prices for worldwide oils, climbed $1.35, or 3.2 percent, to $43.84 a barrel in London.

KEEPING SCORE: Japan’s Nikkei 225 dropped 1.9 percent to 19,556.50 and South Korea’s Kospi lost 0.9 percent to 1,975.27. The Bank of France said it now expects consumer prices in the eurozone’s second-largest member will rise by just 1% next year and 1.5% in 2017, having previously expected increases of 1.4% in 2016 and 1.7%.