Markets Rally: Mario Draghi Pledged To Do Whatever Is Necessary

July 26th, 2012
in econ_news, syndication

Econintersect: Global Markets took off on the back of comments from European Central Bank President Mario Draghi.  The Euro has been under additional stress recently due to sovereign debt issues from Spain, Greece and Italy.

Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.

To the extent that the size of the sovereign premia (borrowing costs) hamper the functioning of the monetary policy transmission channels, they come within our mandate.


Follow up:

The question remains how much Draghi is prepared (or really is able) to do.  There are significant divergences of opinion as you go through the following headlines:

Read More on Draghi Statement:

Opening Market Commentary For 07-26-2012 Just like old times premarket euphoria was boosted up pushing the DOW up 115 points and the SP500 16 points at one point. The cause was that Spanish borrowing costs are back below 7% and the Hopium blubbering of European Central Bank President Mario Draghi of good things to come...
LONDON (Reuters) - European Central Bank President Mario Draghi pledged on Thursday to do whatever was necessary to protect the euro zone from collapse, sending a strong signal that inflated Spanish and Italian borrowing costs were in his sights.
ECB chief Draghi vows total support for euroEuropean Central Bank chief Mario Draghi pledged Thursday full support for Europe's single currency, boosting stock markets and easing pressure on Spanish borrowing costs.

The Dow jumped 200 points after remarks by Europe’s central bank chief about protecting the euro zone helped reassure a market already expecting new stimulus efforts in the United States.
NEW YORK (Reuters) - The Dow rose 2 percent and the S&P 500 and Nasdaq extended gains on Thursday after remarks by Europe's central bank chief about protecting the euro zone from collapse helped reassure a market already expecting the Federal Reserve to step up stimulus efforts.
Draghi: ECB to do "whatever it takes" to save euro - ECB to do "whatever it takes" to save euroBusinessweekFRANKFURT, Germany (AP) — European Central Bank head Mario Draghi is raising expectations the central bank might step in and help lower the high borrowing costs that are putting pressure on government finances in Europe...

Read More on Eurocrisis today:

Europe's deepening economic crisis is cutting into corporate earnings, with the continent's woes threatening to exert a drag on multinational corporations around the world into next year.
Jobless rate in France inched up by 0.8 percent in June compared with the previous month, reaching a record high since August 1999, official figures showed on Wednesday.
German consumer confidence holds up despite crisis: GFKConsumer confidence in Germany is holding up despite growing concerns that Europe's top economy will be hit by the debt crisis, according to a poll.

UK services activity bounces higher in May

The UK service sector grew at the fastest rate for a year in May, but the growth spurt is expected to prove short-lived as recent GDP data show the sector contracting over the second quarter as a whole.
Greece could be heading towards a default on its public debt, under pressure from fed up EU-IMF creditors and caught in a race against time to remain in the eurozone.
The troubling reports put pressure on countries in the euro zone that could be asked to give more financial assistance to their neighbors.

Spain feels debt heat, Greece way off bailout terms

MADRID/BRUSSELS (Reuters) - Spain paid the second highest yield on short-term debt since the birth of the euro at an auction on Tuesday, and EU officials said Greece had little hope of meeting the terms of its bailout, casting fresh doubt on its future in the euro zone.

UK economy contracts 0.7% in second quarter

The UK is sinking further into its double-dip recession at an alarming rate, if the data from the Office for National Statistics are to be believed, with output nose-diving at the fastest rate since the height of the financial crisis in the first quarter of 2009.
U.S. prime money-market funds cut lending to euro-zone banks to a record low in June as concerns about Europe's debt crisis ramped up, according to a Fitch Ratings report.


Steven Hansen John Lounsbury


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