Draghi surprises Europe, dollar rises

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Draghi surprises Europe, dollar rises

European Central Bank President Mario Draghi listens during a news conference following the Governing Council meeting in Tallinn, Estonia, June 8, 2017. REUTERS/Ints Kalnins


European bonds jumped and the euro and bank shares stumbled backwards on Thursday, as ECB chief Mario Draghi took markets by surprise on Thursday with a robust signal the bank had no plans to cut back its stimulus any time soon.

It was the first installment of a packed day for markets, which includes the Senate testimony of the FBI chief fired last month by U.S. President Donald Trump, and will conclude with the result overnight of a snap election in Brexit-bound Britain.

Wall Street opened broadly steady in New York [.N] after the latest drop in jobless claims, but it had been set to be more impressive before Draghi’s caution.

Despite data earlier in the day showing the euro zone growing at its fast clip since the ECB started printing money, the ECB head played down expectations that had been building that it could soon be scaling it back.

“I want to emphasize that basically the ECB will be in the market for a long time,” Draghi said at meeting held in Estonia. Asked about possibility of reducing its asset purchases in September he added: “That was not discussed.”

European banks .SX7E led a sharp stocks retreat after Draghi’s comment but another sharp U-turn hoisted them up more than 1 percent again. The rise came after signs emerged of another euro zone bank rescue, this time in Italy, as well as a pop in energy stocks as oil recovered from a 5 percent tumble.

Draghi’s comments also briefly knocked the euro…Read More

Lakeem Khodra
Lakeem Khodra
News Writer/Contributor at Tyranny News @lakeemk

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