European markets were lifted by somewhat upbeat remarks made by ECB President Mario Draghi in today’s news conference in Frankfurt. He said that the central bank left its key rates unchanged because ‘incoming information confirms that the moderate recovery of the euro area economy is proceeding in line with our previous assessment.’
Though the ECB tweaked its inflation projections for this year slightly lower, Mr Draghi said inflation looks stable and expects a steady rise in the next few years, saying, ‘Inflation expectations for the euro area over the medium to long term continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2%.’ He also re-iterated that the ECB intends ‘to maintain an accommodative monetary policy stance for as long as necessary.’
This lifted both the euro, which rose 0.93% against the dollar, and European bourses and some of this enthusiasm appears to have rubbed off on the US stock market. US share were also lifted by a better-than-forecast drop in jobless claims last week. The number of first time claimants for jobless benefits in the US fell to 323,000, an impressive decline of 26,000, which would seem to give credence to assertions that recent labour-market weakness has largely been on account of bad weather. We’ll have more in this area tomorrow with the release of official government payroll data.