ECB holds rates steady

EU equity and Gilt markets were down today after the European central Bank announced that interest rates for the eurozone will be kept at the present level until March 2017 when the current €80bn a month QE programme is set to finish. ECB President Mario Draghi indicated the QE program was more effective than ever and credit was finally filtering down to the real economy. Despite this, EU markets reacted negatively as investors took the news as an indication that the sentiment towards European growth was still tentative but not negative enough to warrant further stimulus. If ongoing data disappoints then the possibility of further rate cuts and an extension to QE remain clear possibilities.