The Markets Got It Wrong — ECB Vice-President

The ECB overnight deposit rate was cut from -0.2% to -0.3% to push banks to lend instead of parking money at the ECB, Mr Timms said.

The European Central Bank stepped up efforts Thursday to kickstart chronically low inflation in the euro area, cutting a key interest rate and extending its controversial asset purchase program, but financial markets reacted with disappointment.

LONDON, Dec 4 (Reuters) – The euro fell on Friday, having posted its biggest one-day surge in almost seven years when the latest round of easing by European Central Bank fell well short of market expectations, with focus now turning to the U.S.jobs report.

Expectations had been elevated after ECB chief Mario Draghi signaled the bank would act decisively to keep the 19 countries that use the euro from falling into deflation or an economic contraction.

In an interview to the CNBC, Constancio said, “We have to recognize that the markets got it wrong in forming their expectations”.

“Santa Mario did not turn into the Grinch…”

The Italian ECB head had said a range of measures had been discussed and it was prepared to go further if the need arose next year.

Analysts also noted that Draghi admitted the bank’s decision was not unanimous, raising speculation that he limited the scope in order to secure a “very large majority” vote.

He also slightly raised growth forecasts to 1.5 percent from 1.4 percent in 2015, while in 2017, it is seen coming in at 1.9 percent, slightly higher than the 1.8 percent predicted earlier.

Inflation across the euro zone was still stubbornly low, standing at just 0.1% in November, far below the ECB’s target of just under 2%, he said. Chevron and Exxon Mobil fell the most in the Dow Jones industrial average.

In Europe, Germany’s DAX slipped 0.6 percent to 10,721.62 and Britain’s FTSE 100 lost 0.2 percent to 6,258.87.