Thread by @EMgist

ECB: “We are not here to close spreads, this is not the function or the mission of the ECB...Response needs to be fiscal first and foremost” - Lagarde.
We reacted appropriately to our role - ECB Weidmann
ft.com/content/11ab8f…
SX5E BTP MIB DAX (-/=), Bund (=), EUR (+/v)

ECB announced: 1/ it would buy €120bn more bonds by end-year, on top of existing commitment of €20bn/mth, raising QE program to €33bn/mth for rest of year, focusing on corp bonds
EUR (+/v), EZcredit BTP MIB (v/+), Bund (=)

2/ ECB existing TLTRO made “more favourable” via loans to banks below ECB’s sub-zero deposit rate and as cheaply as -0.75%, making ECB the first major CB to operate “dual rate” system effectively subsidising banks by lending at rate < rate paid on deposits

Reaction to ECB Lagarde:
France would “not allow a financial and economic crisis to spread” - Macron
Italy expected “at least in the common interest, initiatives of solidarity” - Mattarella

ECB reaction: While ECB’s package of measures delivered “above expectations”, Ms Lagarde’s “verbal execution was highly flawed” - DB Saravelos
Lagarde remarks “came across like the inverse of [Mr] Draghi’s ‘whatever it takes’ moment” - Rabobank

ECB reaction: “The market had been primed for a 2008-style response...Instead what we got was the impression of the ECB not being in control” - Rabobank