Sober reaction to ECB's QE

From the ECB's point of view, the mere announcement of its quantitative easing program earlier this year has already been having a positive effect, bringing down borrowing costs for companies and households even before any bond purchases took place.

But on Monday, when the central bank actually started its huge bond-buying program, markets generally reacted calmly and were often driven by factors more interesting or worrying to traders, such as ongoing talks about how to rescue the Greek economy.

European shares fell slightly with investors booking lofty gains. The continent's markets had rallied strongly since the start of the year, with the FTSEurofirst 300 surging over 14 percent in the run-up to the ECB's quantitative easing (QE) initiative.

"It's buy the rumor, sell the news, and the positive impact from QE has been broadly priced in by now," Saxo Bank trader Pierre Martin said in a statement.

DAX up again

Germany's blue-chip DAX closed 0.27 percent higher than on Friday, managing to offset losses from earlier on Monday. The index is on an eight-week winning streak, marking its most favorable development in 18 months.

"It's amazing to see the DAX go from strength to strength, with investors hard pressed to put their money in anything different from shares," DailyFX analyst Jens Klatt told DPA news agency.

While last night the euro dropped to its lowest level since September 2003 at 1.0823 against the greenback, it recovered somewhat in the course of the day. But experts say parity with the US dollar is only a matter of time now that the ECP is pumping more fresh euros into the markets.

The measure aims to revive dangerously low inflation and fuel growth in the eurozone.

hg/bk (Reuters, dpa, AFP)