Courtesy of Mish.
Global Uncoordinated Panic
In a 45-Minute Salvo today, the ECB cuts rates to a record low 0.75 percent and reduced the deposit rate to zero. Meanwhile, the People’s Bank of China cut their benchmark borrowing costs (the second time in a month), and the Bank of England raised the size of its asset-purchase program.
Also note the central banks of Australia, the Czech Republic, Kazakhstan, Vietnam and Israel cut rates in June, while the Swiss National Bank is buying euros to defend its franc ceiling.
ECB president Mario Draghi said these events were not global coordinated easing.
I am willing to take him for his word. Thus, it’s safe to assume that what has transpired was more akin to global uncoordinated panic.
European Bond Market Response Was “Not Enough”
The market response to this 45-minute volley of coordinated easing was “not enough”. One look at the bond market in Italy and Spain makes that point crystal clear.
Spain 10-Year Government Bond Yield
Italy 10-Year Government Bond Yield
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