Date: Thursday 31 May 2012
-Draghi (ECB): More optimistic on use of ESM-Bbg
-Draghi (ECB): Resolution system should never use taxpayer money
-Draghi (ECB): Creating banking union could clarify vision
-Draghi (ECB): cannot fill vacuum on fiscal front
-Dudley (Fed): Further easing requires sharp increase in risks
-Spain delays regional budget data to Friday
Ibex 35: 0.48%
The major European equity benchmarks are now bouncing a bit further following a speech from the President of the European Central Bank, Mario Draghi, in which he bluntly called on governments to act.
Particularly worth noting, he went on record as favouring the creation of a banking union and on the injection of European rescue funds directly into banks.
At first glance all of the above would seem to constitute almost a ‘verbal intervention’ of sorts, although it would now have to be backed up by positive 'noises' from governments to have a lasting effect.
Spanish and Italian 10 year bonds are now registering large gains, with the yield on the former falling below 6.5% again.
Acting as a backdrop, The Wall Street Journal comments today on what it describes as increased ‘regulatory nationalism’ in the Eurozone, as the links co-operation between the different national financial systems fray.
Meantime, and evincing the severity of the current tension, the Swiss central bank has this morning announced that it will cap its currency “with the utmost determination,” so as to avoid excessive strength in the unit. In parallel, The Financial Times writes about how the best capitalized banking groups are dealing with “excess deposits” as savers look for havens.
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