The Markets fell yesterday after ECB president Mario Draghi disappointed market expectations for bold easing measures at a press conference on Thursday.
By the end of the trading day the EUR fell 250 pips, Spain 10 year bond jumped 7% to 7.2%, the Spanish Ibex fell 5% and Italy FTSE MIB didn’t stayed behind and closed the day with a 4.6% decline.
Speaking at the ECB’s post-policy meeting press conference, ECB President Mario Draghi said the bank may undertake bond purchases in order to bring down the 'exceptionally high' borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
Draghi also said that any such action by the ECB was conditional on euro zone governments experiencing difficulty on bond markets activating the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
The statement disappointed market expectations for bold steps to counter the debt crisis, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
Today is the first Friday of the month and as usual the highly anticipated U.S. employment report, NFP, is expected later in the day (12:30GMT). After 3 consecutive months of disappointing data, the market is eager to see a rebound in Nonfarm Payrolls figures. The analysts NFP forecast stands on 100K additional new non-farm jobs were added in July.
Crude oil futures rebounded yesterday and early today from a three-week low as the U.S. Congress unanimously approved a new package of sanctions against Iran over its disputed nuclear program, which aim to penalize banks as well as insurance and shipping companies helping Tehran sell oil.