The European Central Bank (ECB) and the Bank of England have now made their decisions on interest rates and rate policy for September. The Bank of England effectively did nothing, while Mario Draghi and the ECB decided they better take some actions.

The monetary policy decision by the Governing Council of the ECB acted on interest rates by lowering the rate on the main refinancing operations by 10 basis points to 0.05%. The rate on the marginal lending facility was cut by 10 basis points to 0.30%. And the negative rate policy for reserves continues, with the interest rate on the deposit facility cut by 10 basis points to -0.20%.

One word of caution on the ECB and Mario Draghi needs to be considered on Wednesday. The market was hoping for news of asset purchases to the tune of somewhere around 500 billion euro. The market may have to wait for this in the actual press conference, which will come shortly after the formal rate decision is announced.

As for the Bank of England, it left its policy unchanged. The asset purchase program was left at 375 billion pounds with maturities continuing to be reinvested.

Some of the news was expected, but we would still look for further commentary from Mario Draghi later in the morning. Stay tuned.

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