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Flash: Draghi comments ignite attention – Deutsche Bank

FXstreet.com (Barcelona) - In terms of weekend news flow, the headlines were relatively thin, though comments from Draghi overnight have garnered some attention.

In a text of speech prepared for the IMF Conference held today in Shanghai, the ECB president defended the OMT programme by saying that "virtually all economic agents, including corporations, banks and households" were benefitting from the calm that had returned to financial markets since August 2012.

According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Draghi deflected criticism that OMT had replaced the need for fiscal consolidation or would reintroduce excessive compression of Euro area bond yield spreads.” Draghi added that OMTs are designed to keep government bond yields just below 'panic' levels, not to bring them down to levels that would somehow help government solvency. These comments come ahead of a court hearing, which will hear objections to the OMT on June 11-12, to be held in Germany's Constitutional Court in Karlsruhe.

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