Optimism is the dominating force in the markets on the day after European Central Bank Chairman Mario Draghi magicked up a global stock market rally.

The Spanish equity benchmark index Ibex35 rose strongly in the morning session. It has already passed the 8,000 point level. Meanwhile, the Spanish risk premium - the difference in the yield on 10-year Spanish treasury bonds and their German counterparts - has fallen to 414 basis points (4.14 percentage points), leaving behind the 500 level seen earlier in the week. The Spanish 10-year yield has dropped all the way down to 5.8%.

Italian and Portuguese markets have also reacted with strong gains. In short, the 'Draghi plan' has led to an all out buy-fest for global markets with the periphery in the lead.

The markets are reacting to the European Central Bank's plan for the unlimited purchase of 1 to 3 year bonds from countries that comply with the conditions imposed by the European rescue mechanisms, EFSF and ESM.

China released some good news of its own. It announced a stimulus plan for construction worth 124 billion euros, 2.1% of the country's gross domestic product, spurring on Asian markets that were already hot to trot after Draghi's piece of wizardry.

MG

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