Draghi Rally Fizzles: Failure In Pictures
Mike (Mish) Shedlock | Jan 22, 2016 01:58AM ET
ECB President Mario Draghi attempted to talk the euro lower and the market higher today in a lengthy one-hour press conference following his decision to not change interest rates.
Markets are now closed, so let's put a spotlight on the results (or lack thereof) of Draghi's verbal intervention.
That is the key chart for someone who desperately desires the euro to sink vs. the US dollar.
In 15 minutes, the Euro sank from 1.09 to 1.078. For the rest of the day, the Euro rallied right back where it started from.
Congratulations are in order. Draghi managed to drive the yield on the German bond from -0.20% to -0.24%.
How that's supposed to cause inflation remains a mystery given that it's not done a damn thing yet.
Yield on the US 10-year treasury note reversed its freefall to close back above 2%. Will it stay there? Why should it?
The New York Fed is now openly discussing negative interest rates in the US if there is another crisis.
The S&P 500 did a number of gyrations, but the key Draghi-sponsored effect is the largest green candle. A decent rally ensued off the lows, but that rally faded into the close.
Brent crude did rally more than $2 off the lows. However, the rally stalled before hitting $30. Neither US West Texas Intermediate (WTI) nor Brent is above $30 as I type.
Jawboning oil is not likely to work, even in the intermediate-term.
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