These were the yields and basis point movements of some of the most watched 10 year bonds by the close in Europe:

Spain: 6.03% (-38bp)
Italy: 5.26% (-25bp)
France: 2.26% (+2bp)
Germany: 1.56% (+8bp)
UK: 1.71% (+7bp)
USA: 1.67% (+7bp)

The European Central Bank finally confirmed most of the information which had been drip-fed to the markets throughout the last few days today. In exchange for strict conditionality it may -at its discretion- carry out unlimited sovereign bond purchases.

Those will be fully sterilized and, furthermore, collateral rules will be eased, although the possibility of further non-standard liquidity measures was not discussed.

All of the above, as he adamantly reiterated, falls squarely within its remit in so far as its seeks to quash unfounded fears over the irreversibility -or not- of the single currency area, thus restoring the effectiveness of its monetary policy.

Naturally, however, investors are now asking the question what next? More specifically, will Spain move to ask for aid, or does it still have doubts.

Critically, nevertheless, German Chancellor Angela Merkel is said to share Draghi's belief that he is acting fully within his mandate.

Meantime, and in the UK, Prime Minister David Cameron's government will temporarily loosen requirements on homebuilders and businesses to expand their premises; this in a bid to boost economic activity.

Also in the UK, house prices fell by 0.4% month-on-month in August, according to the latest data from mortgage lender Halifax.

Finally, Stateside, the ISM's service sector purchasing managers' index rose to 53.7 points in August, versus last month's reading of 52.6.

The ADP employment report showed the private sector creating 201,000 jobs in August (Consensus: 140,000).

AB

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