It may not seem like it, but the European Central Bank’s latest decision is a game changer – it will materially alter the market outlook, not just for global markets but for Australia as well.
To see this let’s first consider what the ECB’s decision isn’t about. The ECB’s decision has almost nothing to do with the threat of deflation or fears over a weakening economy. That’s the press surrounding the decision: I see this. Yet even the ECB said itself that: “We don’t see deflation, or a self-fulfilling negative spiral of expectations … we don’t see households postponing their spending plans.”