– European stocks hit by a couple of days, but here comes the rebound. Squares positive headlines flying. MPS is the boom and touches share + 44%. What happened? Gone are the uncertainties about the soundness of banks, on the geopolitical situation and the risks that contains the dramatic fall in oil prices? No. He spoke to Mario Draghi, the ECB’s number one, and he simply said what investors wanted to hear: quiet, I got it.
Guido Cainiello
RATES UNCHANGED – First, Draghi said that while the directors of the European Central Bank has decided to ‘ consensus interest rates “will remain stationary at higher low for a protracted period of time “. And there are two good news that contains this sentence: rates remain “low”, that is at historic lows of 0.05% and the directors made the decision to ‘, “consensus”, in spite of who boasted divisions among bankers ECB. Two first positive news that have started to trace the titles of the main European markets.
A REVIEW OF MONETARY POLICY – Dragons then said that “the next summit in March will be reviewed monetary policy of the ECB, in the light of inflation which remains weaker than expected and because the lowering of oil prices. ” The ECB is determined to achieve its goal of bringing inflation to 2% and for this “ there is no limit to the extension of the measures envisaged by the mandate “. Translated: Dragons basically said that from now on it becomes more real the opportunity to further extend the Quantitative Easing. And that’s another good news that excites investors: greater liquidity on the real market can only do well.
IN THE RIGHT DIRECTION – “There is no the same financial situation that existed before the crisis, the banking sector is stronger , we’re going in the right direction. ” The number one of the ECB has reassured the markets talking about stability and “positive effect” produced by the measures put in place. But also he pointed out that to complete the growth path must respect the Stability Pact . Reassuring words and decided that they are pleased the markets.
THE STORM WAS GAME BY ECB – In truth bags, especially Italian ones, had started to wobble when he was out in the open the intention of the ECB to make the controls on impaired loans of the banking institutions. But Draghi has spent a few words on this, dampening the tone and making clear: “The questionnaire sent to the Supervisory Authority was sent to the various banks in the euro, not only Italian. The Italian and European banking system is solid” .
EFFECT DRAGONS – So when Draghi speaks everything settles everything or almost. During and after the press conference of the ECB President, the main European markets have confirmed a ‘uptrend. A sign that Europe needs someone outlining a way forward towards growth economy.
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