Euro Rises as ECB Draghi Painted a Better Picture

Euro extends rally against dollar after ECB left rates unchanged at 0.50% and President Draghi painted a brighter picture in the press conference.

 

 ECB revised down this year's GDP forecast to -0.6%, down from prior forecast of -0.5%.

 

 However, Draghi said the economy "should stabilize and recover in the course of the year." And ECB raised 2014 growth forecast to 1.1%, from prior projection of 1.0%. Regarding other measures to stimulate the economy, including negative deposit rates, Draghi noted that there is "no reason to act on all these fronts" and these are the measures to "keep on the shelf".

 

Span sold EUR 4.02b in bonds today, slightly overshot its maximum target of EUR 4b.

 

EUR 1.528b in March 2015 bonds were sold with yield at 1.903%, down from prior 2.28%. EUR 1.009b in July 2016 bonds were sold with yield at 2.706%, up from prior 2.44%. EUR 1.487b in 10 year bonds was sold with yield at 4.517% versus prior 4.612%.

 

Spain has already completed 60.3% of its funding target this year.

 

France sold EUR 7.988b in OATs today. Yield on the benchmark 10 year bond rose to 2.04%, up from 1.81% in prior auction.

 

BoE left rates unchanged at 0.5% as expected while it also kept the asset purchase program at GBP 375b. Only a brief statement was released and focus will turn to minutes to be published on June 19.