Euro rises as Mario Draghi resists economic stimulus

Many continental European stocks fell yesterday, while the euro rose against sterling and bond yields increased, as traders were taken aback by the decision of Mario Draghi’s ECB to refrain from adding stimulus amid concern the economic recovery in the eurozone is losing momentum with inflation stuck close to zero.

“A lot of people wanted to see a bit more stimulus from Draghi,” said Hassium Asset Management chief executive Yogi Dewan, referring to the ECB’s decision to keep all its rates steady and the revelation that the ECB did not discuss an extension to its bond-buying programme, known as quantitative easing, at yesterday’s meeting.

“The decision to maintain rates was certainly no surprise, yet by noting that the committee had not even discussed the notion of lengthening their quantitative easing programme beyond March, the bank finally showed markets a glimpse of what a future without ECB easing might look like,” said Joshua Mahony, market analyst at IG, an online trading firm.