Inflation talk tanks Euribors

In today's ECB press conference, Jean Claude Trichet gave the first hints of a change in stance in policy after he says that there are short term pressure on inflation, and upward pressure mainly due to energy prices. Other key points:
ECB's Trichet says bond purchase programme is ongoing
ECB's Trichet says interest rates are appropriate
ECB's Trichet says inflation expectations remain firmly anchored
ECB's Trichet says expect price stability over medium term
ECB's Trichet says governing council will continue to monitor all developments very closely
ECB's Trichet says our non-standard measures are temporary in nature
ECB's Trichet says recovery is expected to be dampened by balance sheet adjustment
ECB's Trichet says downside risks to growth from renewed tensions in some segments of financial markets
ECB's Trichet says risks to economic outlook are still slightly tilted to downside, uncertainties remain elevated
ECB's Trichet says monetary policy stance and liquidity provision and allotment modes will be adjusted as appropriate

Euribors came of at one point 15 fat ticks in the afternoon session, as the curve began to steepen as traders anticipate a rate hiking cycle. The Eur/Usd was one of the biggest benefactors gaining over 200 pips in the afternoon.
Despite these massive moves, I personally feel we are very far from any rate hikes. With Ireland still going through bank troubles, debt issues in Greece Spain and Portugal, it is unlikely given the fragile state of these countries that any rate hikes will be forthcoming.

Stocks continue its advance higher, as we enter Q4 earnings season. An interesting stat:
As part of the most recent observations on the boil up (melt up is so QE1) in the S&P, we find something quite interesting. A quick glance at the chart below shows the general market 45% climb since Bernanke's leak of QE2 in August, as well as the market's 10 day (purple line) and 50 day (green line) moving averages. As a point of reference the S&P has been above the 10 day average for 30 days straight, and above the 50 day average for 92 days straight. What is remarkable are some statistical findings as pertain to the average's movement with respect to the SMAs. Sentiment Trader points out that while as part of the recent surge in the S&P, the market has gone for "92 days without closing below its 50-day average, which has been matched only 17 other times since 1928." Where it gets scary, is that as pointed out, during this time the market has not closed below the 10 DMA once during the past 30 days. And as Sentiment Trader notes, "this has never happened before, in 82 years of history." Congratulations to the Centrally Planned Socialist States of America: its Chairman has just made the Guinness Book of Manipulation Records.