The ECB, however, is more difficult since Draghi acknowledged not all his plans have the endorsement of all council members. In particular, the Bundesbank opposes bond purchases.
He did say the ECB may undertake sizeable bond purchase, and the mechanism would be developed in the next several weeks. Draghi also said countries in need of help need to make a request.
The bailout funds - the European Stability Mechanism and the European Financial Stability Facilty (explain this) could then be used.
“Everyone’s waiting for Spain to formally request a bailout. When they formally request a bailout, then the ESM and ESFS can provide support,” said Dan Greenhaus, chief global strategist at BTIG.
Market expectations were running high after Draghi last week committed to whatever it takes to support the euro. That sparked a big rally in stocks and gains in the euro.
The Dow was off more than 150 in afternoon trading Thursday, and the eurodipped to 1.21. The move in bond yields was dramatic, with sovereigns Italy and Spain seeing yields rise dramatically. The Spanish 10-year was yielding 7.2 percent, after earlier falling to 6.6 percent. The U.S. 10-year yield fell to 1.466 form its intraday high of 1.577 percent.
“All major central banks did nothing but hold out the promise of big action next month,” said Marc Chandler, chief currency strategist at Brown Brothers Harriman. “This is a big reversal on the euro.”
“This was a big disappointment for the market because it was not immediate action,” he said.
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