English | دری

Eurozone crisis: ECB’s Draghi disappoints markets

in International Business

Eurozone crisis: ECB’s Draghi disappoints markets

European markets have fallen following comments from European Central Bank president, Mario Draghi, stating that the bank would come up with more measures to support the euro “over the coming weeks”.

Madrid stocks slumped more than five per cent as investors looked on in vain for the measures they had hoped would help stabilise Spain’s borrowing costs, while other European markets were down as well, reversing early gains.

 The yield on Spanish 10-year bonds rose from 6.6% before Mr Draghi spoke to 6.9% afterwards, while Italian  10-year bond yields rose from 5.7% to 6.2%.

The euro briefly topped US $1.24 after Draghi spoke of possible ECB market intervention, but plunged on concerns that he announced no concrete measures.

 Last week, Draghi had promised that he would do everything in the ECB’s powers to save the euro, raising hopes that the ECB would intervene directly on government bond markets to force down borrowing costs for  Spain and Italy.

 Analysts were expecting more details and immediate action from the ECB, but were disappointed.

“Once again, we have no commitment to action from the ECB, and no execution of promises previously made,” said Carl Weinberg, chief economist at High Frequency Economics.

 In his speech, Mr Draghi said that the ECB’s bond-buying process would resume, but that it would differ from its Securities Markets Program (SMP), which involved buying large quantities of government bonds on the open market. Instead, he added the new scheme would involve buying short term bonds, also making it clear that the market intervention is a short term measure, to keep the markets happy until governments solve their own problems.

Related Articles

Pakistan, US signed agreement on NATO Supplies Transit to Afghanistan

US Deputy Ambassador Richard Hoagland and Additional Secretary Defense Rear Admiral Farrukh Ahmed signed the agreement on transit of cargo

Facebook boosts number of shares on offer by 25%

Facebook says it will sell 25% more shares than first planned in its flotation in response to strong demand. The

Japan forces through its delayed $1.1tn budget for 2012

Japan’s government has forced through its 2012 budget, after it was stalled by a political battle over plans to double

No comments

Write a comment
No Comments Yet! You can be first to comment this post!

Write a Comment

Your e-mail address will not be published.
Required fields are marked*

Time limit is exhausted. Please reload the CAPTCHA.