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German yields drop on Draghi’s comments

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Draghi’s zero tolerance policy against excessively low inflation and Constancio’s “shall do whatever required” comment sent German yields lower.

    The benchmark 10-yr bund yield fell more than one basis point to 0.102%. The short duration 2-yr bund yield fell one basis point to -0.493%.

    ECB’s Draghi, via his foreword in 2015 annual report released today, assured markets there is zero tolerance to low inflation. The future of the global economy remains uncertain and there are questions about Europe's ability to weather new shocks, the president of the European Central Bank said in its annual report on Thursday.

    Meanwhile, ECB’ Constancio, while testifying to parliament, also said the bank is ready to do whatever required to ensure price stability.

    Both statements were ready by markets as an indication more easing could be in the pipeline, thus pushing bund prices higher and yields lower.
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