ECB's Draghi talks the latest on rates and bond-buying

ECB's Draghi talks the latest on rates and bond-buying

Previous year was the strongest in a decade for economic growth in the euro zone, but a recent slump in investor sentiment since the start of 2018 could threaten the ECB's inflation outlook.

He said it could be that the exceptionally strong growth of previous year is returning to a more normal pace and that the bank would have to study incoming data more.

- During the press conference, President Draghi highlighted last year's strong economic growth.

Interest rates on the main refinancing operations were unchanged at 0.00 percent, according to a statement from the ECB's Governing Council. We expect the Fed to continue to raise interest rates on a steady, well-signalled path and now like holding the front end of the U.S. treasury curve as well as inflation-linked bonds.

European equities were up 0.4 percent ahead of Mario Draghi's 1230 GMT news conference and as MSCI's most widely-followed gauge of world stocks pulled out of its longest losing streak of the year so far.

The economy in the 19 countries that use the euro currency turned in strong growth of 2.5 percent past year, the best in a decade.

The bank also confirmed that the net asset purchases, at the current monthly pace of Euro 30 billion, will run until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.

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- In the USA, economic data releases have continued to be strong overall and the tax cuts along with other potential fiscal stimulus measures are likely to provide further support for economic growth this year.

But, investors will be waiting to see whether President Mario Draghi gives any clues away as to the future of the institution's asset purchasing program, with speculation mounting that the European Central Bank will prolong the massive scheme created to stimulate the region's economy by buying bonds.

Draghi said there was also concern over the risk of an escalation in protectionism.

Policymakers will take "baby steps" towards winding down QE by the end of 2018 beginning at either June or July's meetings, he predicted.

Draghi said that some causes could be temporary, such as weather, strikes or calendar effects like the timing of Easter. The bank suggested that rates would remain lower for a while after quantitative easing ended. They can make it easier to buy houses with mortgage borrowing and take pressure off the finances of indebted eurozone member governments by lowering their debt service costs.

That didn't stop him from hammering home governors' "unchanged confidence" that they would hit the target, pointing to "certain encouraging signs" that wages were beginning to increase - potentially boosting prices in turn.

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