Gold Laughs in Draghi's Face; What Does it Mean? (GLD) (IAU)
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Markets Move as the Mighty Draghi Flexes ECB Muscle
September 6, 2012 12:05 PM EDTWith the fate of the Euro hanging in the balance, and despite numerous objections from German politicians and criticisms by Bundesbank, Mario Draghi largely delivered during his remarks today following an ECB meeting in Frankfort. The ECB president made bold comments earlier this year when he vowed to preserve the Euro. He followed up on the promise today when he announced an unlimited bond-buying plan that will target distressed debt in the euro zone.... More
ECB: Technical features of Outright Monetary Transactions (OMTs)
September 6, 2012 9:10 AM EDTBelow is a press release from the ECB on details of the Outright Monetary Transactions (OMTs).
6 September 2012 - Technical features of Outright Monetary Transactions
As announced on 2 August 2012, the Governing Council of the European Central Bank (ECB) has today taken decisions on a number of technical features regarding the Eurosystems outright transactions in secondary sovereign bond markets that aim at safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy. These will be known as Outright Monetary Transactions (OMTs) and will be conducted within the following framework:
Conditionality
A necessary condition for Outright Monetary Transactions is strict and effective conditionality attached to an appropriate European Financial Stability Facility/European Stability Mechanism... More
ECB: Mario Draghi Introductory Statement
September 6, 2012 8:58 AM EDTBelow is the introductory statement from ECB President Mario Draghi:
Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of todays meeting of the Governing Council, which was also attended by the President of the Eurogroup, Prime Minister Juncker, and by the Commission Vice-President, Mr Rehn.
Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. Owing to high energy prices and increases in indirect taxes in some euro area countries, inflation rates are expected to remain above 2% throughout 2012, to fall below that level again in the course of next year and to remain in line with price stability over the policy-relevant horizon. Consistent with this picture, the underlying pace of monetary expansion remains subdued. Inflation expectations for the euro area economy continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. Economic growth in the euro area is expected to remain weak, with the ongoing tensions in financial markets and heightened uncertainty weighing on confidence and sentiment. A renewed intensification of financial market tensions would have the potential to affect the balance of risks for both growth and inflation.
It is against this background that the Governing Council today decided on the modalities for undertaking Outright Monetary Transactions (OMTs) in secondary markets for sovereign bonds in the euro area. As we said a month ago, we need to be in the position to safeguard the monetary policy transmission mechanism in all countries of the euro area. We aim to preserve the singleness of our monetary policy and to ensure the proper transmission of our policy stance to the real economy throughout the area. OMTs will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro. Hence,... More
