– This is the script of CNBC's news report for China's CCTV on March 11, Friday.
Welcome to CNBC Business Daily, I'm Qian Chen.
After an initial sharp spike in European equities, led by the banks and a 1 percent plus drop in the euro against the dollar following the European Central Bank's raft of measures to stimulate the euro zone economy, things started to take a curious turn.
Banks mostly managed to hang onto gains after President Mario Draghi's larger than expected stimulus package -- which included a decision to cut rates further into negative territory and a extension of its bond-buying program -- but the euro, which touched at low of around $1.0830 against the greenback during Draghi's speech staged a dramatic U-turn.
The single currency bounced around 1.7 percent higher, trading at around $1.1192 after the press conference ended, even after what most analysts agreed were wide-ranging measures that were more expansive than predicted.
So what went wrong? Draghi pledged that interest rates would stay very low for a long time and indeed low "well past the horizon" of the ECB's bond purchases. The central bank also cut its benchmark interest rate from 0.05 percent to an all-time low of 0 percent as well as taking its deposit facility from -0.3 percent to -0.4 percent, meaning banks effectively have to pay more for the ECB to hold their cash overnight.
But the ECB President also suggested that this deeper cut into negative territory could be the ECB's last, and in doing so pushed the euro higher and forced stocks lower.
"Rates will stay low, very low for a long period of time and well past the horizon of our purchases. From today's perspective and taking into account the support of our measures to growth and inflation, we don't anticipate that it will be necessary to reduce rates further. Of course, new facts can change the situation and the outlook," Draghi told journalists at the press conference at the ECB headquarters in Frankfurt.
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[JOHN-track SILVIA Wells Fargo Securities Chief Economist] "061925 They've done a pretty good job of preventing the downside, but they really havent kicked up the upside, with the respect of economic growth, and I think as you mentioned earlier, both growth and expectation have been lowered over time, so it leads to an contradiction - Mario Draghi said in once upton a time that we will do whatever it takes, and now hes telling me, well, we're done anything with respects with interest rates. I think it does lead to a communication's problem, you know, what are you really telling us. 061958"
Meanwhile safe haven gold got a bid, gaining over 1 percent to trade around $1,268 per troy ounce. German bond prices also turned lower on the day, boosting yields, which in turn helped the 10-year Treasury yield to a high of around 1.950 percent.
But while the moves seen in the aftermath of Draghi's speech were perhaps not in the direction Draghi would have liked, analysts are positive on the impacts the deal will have for markets and the economy longer term.
"Ignore the euro's swoon; this is an aggressive response," said chief euro zone economist at Pantheon Macroeconomics, Claus Vistesen.
CNBC's Qian Chen, reporting from Singapore.