While the stock market traded somewhat higher today, supported by another bounce in oil prices, trader eyes are focused on tomorrow’s ECB monetary policy meeting and statement. Rumors abound that another stimulus package will be announced and the markets have been waiting all month for this news.

It was only last December the ECB set forth an underwhelming set of easing measures that really didn’t do anything for their economy. Yet, the markets are pricing in at least another rate cut by 10 basis points to take it even further into negative territory, to minus 0.4%. Perhaps even more but I doubt it.

Negative interest rates have recently been sharply criticized for escalating a so-called global currency war, squeezing bank earnings and actually tightening credit conditions rather than improve them.

For example, since Japan turned to negative interest rates a few months ago it had to cancel its 10-year auction for the first time ever due to sub-zero interest rates. Talk is they won’t cut interest rates for a time in order to stabilize their bond market.

I think this is what the central bankers are learning about negative interest rates. You can forget about raising money from the bond market with sub-zero government rates. No one wants them, especially as shaky as they are and with skyrocketing debt behind them.

Even today’s $20 billion US 10-year Treasury with its low rates was only able to fill 56% of its allotment, so there is some question as to whether the ECB will do any good by going deeper into negative rates, so we could see the ECB use some other methods.

Another point, ever since Fed governor Bullard raised the issue of another QE, is whether the ECB will roll out another QE in Europe now that they are suffering from deflation.

In reality, QE doesn’t do squat for their economy, as none of their other QE programs have failed to stimulate their economy because the central banks have held the liquidity injections in reserves. Frankly, analysts feel another QE is unlikely, so we could see some disappointment unfold in a “buy the rumor—sell the facts” scenario shaping up.