European stocks back to earth after Draghi bombshell

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European stock markets fell back marginally on Wednesday after posting their bes...

- European stock markets fell back marginally on Wednesday after posting their best performance in five months a day earlier thanks to a policy speech from European Central Bank chief Mario Draghi that flagged a potential return to bond-buying and lower interest rates.

Draghi’s speech in Portugal sank the euro and drove major euro zone bond yields back below zero, slashing effective market borrowing costs, giving a boost to companies worried by sagging growth and driving the pan-European STOXX 600 index almost 2% higher. That all followed some minimal gains overnight in Asia after news that China and the United States are rekindling trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping at a G20 summit in Japan.

Since then, expectations of policy easing by the ECB and U.S. Federal Reserve has helped the STOXX 600 recoup most of those losses and helped drive a 4% gain this month. The Fed concludes its June meeting after European markets close.

 

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