"The Globe and Mail" declare : ECB nods to euro zone recovery, but keeps money taps open

collected by :John Miller

Euro zone economic growth is steadily picking up pace and the risks to the survival of the single currency are receding after pro-euro centrist Emmanuel Macron won the first round of France's presidential vote. Traders argued that Draghi's comments were more cautious than they had expected and the euro fell against the dollar while yields on euro zone government bonds, which tend to move in tandem with central bank rates, dipped. Despite calls from Germany, the euro zone's economic powerhouse, for a gradual reduction of stimulus, the ECB even left the door open to further rates cuts or an increase in asset buys. ECB policymakers will have a chance to reassess the situation in June, when the bank publishes new growth and inflation forecasts. With its policy arsenal nearly depleted and inflation now comfortably above 1 per cent, policymakers from Germany and other northern euro zone countries are calling for mapping out the way to the exit.

As it stated in Credit Suisse amended its Legal & General rating to "under-performing" on Thursday and, as a result, the U.K.-based insurer's facebook/" target="_blank">shares closed more than 5.4 percent lower. The ECB left its ultra-easy monetary policy stance unchanged on Thursday though Draghi surprised some investors by explicitly recognizing the bloc's economic recovery. Looking at individual stocks, Neste shares ended over 4.2 percent lower after the Finnish oil refining firm reported weak margins in renewable and retail products. Germany's DAX and the U.K.'s FTSE 100 both closed down around 0.2 percent while France's CAC dipped over 0.7 percent on Thursday. The euro initially reached the day's peak of $1.0930 as Draghi struck an optimistic tone when answering questions from reporters.

European markets close lower after ECB keeps rate steady
As it stated in

ECB keeps its foot on the stimulus pedal

Other stimulus measures include keeping the bank's interest rate benchmark at a record low of zero. The ECB is lagging far behind the U.S. Federal Reserve, which is already raising interest rates after the U.S. economy recovered faster from the Great Recession. The ECB has also imposed a minus 0.4 percent interest rate on deposits it takes from commercial banks. Analysts consider that wording a way of discouraging investors from speculating about the end of the stimulus -- which might prematurely drive up market interest rates, blunting its intended benefits. That could lead to an announcement in September on the timing of the taper to the stimulus.

ECB keeps its foot on the stimulus pedal

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