01.09.2014 | 10:15

Robeco: Draghi hints at further policy measures

Peripheral bonds again outperformed German Bunds this week. Performance was especially strong in the first days of the week due to Draghi’s comments at Jackson Hole.

Around the Italian auction, peripheral debt gave up some of the gains amidst rising tensions in the Ukraine. Spanish bonds have returned 13.3% year to date, Italian bonds 12.0% and Irish bonds 11.2%.


In his Jackson Hole speech Draghi acknowledged the recent fall in inflation expectations. His speech led to increased speculation on Quantitative Easing by the ECB. Draghi also called for structural reforms and fiscal stimulus.

France and Italy

France replaced two ministers who had openly criticized the Eurozone’s austerity policy, but Prime Minister Valls warned that the recovery is too weak for further spending cuts and called on the ECB to do more. Italian Finance Minister Padoan hinted that the goal of a balanced budget may be further delayed as the government will have to revise its growth projections downward.


German Finance Minister Schäuble reacted by stressing the need for further structural reforms and budget discipline by countries, as the available monetary policy instruments are finite.


After three weeks without issuance from peripheral countries, Italy auctioned EUR 8bn bonds on the 28th, after which it has already covered over 80% of its funding needs for 2014.

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