The ECB lowered its short-term rate to 0.05% from 0.15%. The central bank also is trying to force Euro’s out of the bank vaults by increasing the fee it imposes on banks to store money at the ECB, to 0.2% from 0.1%.
Mixed messages sent oil products higher, but oil continues to be grounded by an ever growing U.S. supply. While crude supply only increased by 40,000 barrels, overall supply at Cushing Oklahoma increased to a whopping 39.9 million barrels.
Oil demand is surging and commodities are on a tear as Ben Bernanke helps add into a buying frenzy. Oil and gasoline have led the commodities market to an eight-day winning streak, the best since 2010.
Oil bulls were living in a Fed paradise. Somehow up until the Fed meeting the market must have believed that Fed Chairman Ben Bernanke wasn't serious about that taper thing, but they found out that he was serious, very serious.
Fed Chairman Ben Bernanke does his best impression of a one-handed economist. But while the market focuses of the possibility of softening demand because of the Fed and China there was one area where demand actually improved...
The oil market of course knows that QE is bullish. Not only does it break the dollar, making oil more expensive, but it should be as stimulative to the economy as an interest rate cut increasing demand.