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'Super Mario' Jumps to Center Stage

September 10, 2012

Investors worldwide cheered the chairman of the European Central Bank, Mario Draghi, and his "super" bond-buying plan.

-Bernie Williams, vice president, Discretionary Money Management

 

Investors worldwide cheered the chairman of the European Central Bank, Mario Draghi, and his "super" bond-buying plan.

Although details leaked earlier in the week, the ECB officially announced on Thursday that it would pursue unlimited secondary market purchases of member country bonds with maturities of up to three years. This helps to lower financing costs in both the public and private sectors in the weaker eurozone economies such as Spain and Italy. Spanish and Italian government bonds rallied strongly, with the yield on the respective 10-year bonds dropping by 1.13% and 0.72% to 5.72% and 5.13%.

 

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