Draghi Says ECB to Do Whatever Needed as Yields Threaten Europe
By Jeff Black - Jul 26, 2012 12:43 PM GMT+0200
“To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate,” Draghi said during a speech in London today. “We have to cope with the financial fragmentation, address these issues.”
ECB President Mario Draghi said the ECB will do whatever is needed to preserve the single currency. Photographer: Hannelore Foerster/Bloomberg
The comments come as Spanish policy makers call on the ECB to do more to fight a renewed bout of financial turmoil that pushed the yields on the country’s bonds to euro-era records this week. Spanish bonds rose after Draghi’s remarks. The yield on the 10-year bond, which touched a record 7.69 percent on July 22, fell 14 basis points. It was at 7.24 percent at 12:27 p.m. in Madrid.
``His comments certainly suggest that ECB purchases of Spanish and Italian bonds are back on the table for discussion, as is another LTRO,'' said Chris Scicluna, an economist at Daiwa Capital Markets Europe in London. ``But -- just like last summer -- we would expect any new ECB bond purchases to be temporary and limited until other policies are put in place.''
The euro also jumped and stocks rose. The single currency climbed as high as $1.2208 after trading at $1.2118 before he spoke. The Dow Jones Stoxx 600 Index climbed almost 1 percent, rising as high as 252.83 points.
To contact the reporter on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net
To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net
Keine Kommentare:
Kommentar veröffentlichen