ECB cuts 25bp, and stocks soar again

Well we certainly had some volatility back in the market accompanied by some huge volume. Bund bounced very nicely of the 124.50 resistance and got smashed to the support level. This move down was accompanied by big volume, with over 1 million contracts traded.
Euribors as you would expect got drilled lower too, surprisingly the spreads stayed in the range, with plenty of opportunities to leg up spreads, especially with the increased liquidity.
ECB presidents Trichets decision to cut rates by only 25bp was a big surprise to the market, as lets face it, Europe is in a deep recession with unemployment and low inflation. I believe Trichet is trying to give him self more room for maneuver rather then trip over them selves cutting rates as low as they can go. The question you have to ask is that does it make a meaningful difference if rates are at 0.5% and 1.25%. Will it spur the economy any more? In my opinion not really. People call Trichet slow to react, but I guess time will tell whether it will make any difference or not, I don't think it will, when one nation starts to recover so will they all.
Stock look like they already believe we are at a turning point, with a 20% plus rally from its march lows. How much further up can it go, well the market always takes the least expected path. There is a lot of money on the sidelines that can propel this market higher, but before the end of the year I still believe we will make another attempt at the lows. Tomorrows Non farm payroll number will probably confirm a very bleak jobs picture still, and remind us all we are far from near to some sort of recovery, cause jobs are the most vital part of kick starting the economy.