The ECB didn’t do much yesterday at its monthly Interest Rate Meeting. Even Mario Draghi in his accompanying press conference appeared to be pushing off making any formal statements about the future other than to say the the ECB’s LTRO was working. The meeting which is usually delivered on a Thursday was pushed ahead to Wednesday due to the upcoming Good Friday holiday. As such, many analysts were joking that the ECB’s lack of actions at the meeting indicated that they were already on vacation.
The one nugget of info that was useful for traders was Draghi’s answer to a question about rising Spanish and Italian bond yields and whether the ECB would step in with purchases to support the bond market. Draghi answered, "Markets are asking these governments to deliver,” thereby revealing that he didn’t believe the ECB was destination to fix the problem. As such, other than another PIIGS nation needing a bailout, the ECB appears ready to sit tight with its LTRO program and let the sovereigns try first to solve their fiscal issues with budget cuts.
More from the Telegrapgh on the ECB:
Mr Rehn said Lisbon, which has received a €78bn (£64.5bn) rescue package, is likely to need more public support before it can return to the bond markets next year. "From the European Union side, it would be wise to be prepared. Some kind of bridge needs to be built when Portugal returns to the markets," he said.
The warning came amid rising fears over the stability of Spain and Italy. Mario Draghi, president of the European Central Bank (ECB), said "sinner states" must execute their austerity reforms to reassure the rattled markets. Read More
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