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Jean-Claude Trichet, ECB president and Vítor Constâncio, ECB vice-president, at a press conference, Frankfurt, June 09, 2011.
Markets: Trichet signals rise in interest rates in July;
Changes for Greek bondholders must be 'absolutely voluntary'
Jean-Claude Trichet, president of the European Central Bank, said today at a
press conference following the decision of the governing council to keep
interest rates on hold, that 'strong vigilance' was needed in response to
inflationary pressures - a code for a plan to to raise
interest rates in July. On Greek debt, he made clear that any change in terms
for bondholders must be 'absolutely voluntary.'
“We are not in favour of restructuring, haircuts and so
forth,” Trichet said. “We call for avoiding all
credit events and selective defaults. We exclude all
elements which are not voluntary.”
Trichet said the
central bank does not have to "design anything" in
reference to the ongoing discussions on a second bailout for
Greece. "That is a
responsibility for governments."
The ECB president stressed that the bank did not
intend to see Greece default on its sovereign debt. There would be "no credit
event, no selective default" by Greece
At today's meeting, the governing council had no
objections to the proposed candidate for ECB
president from Nov 1 next, Mario Draghi of
Italy, "who is a person of recognised
standing and professional experience in monetary
or banking matters, as required by Article
283(2) of the Treaty on the Functioning of the
Trichet said that ECB staff forecasters had
raised their forecast for Eurozone inflation this year to 2.6% from 2.3% and
they foresee annual real GDP growth in a range between 1.5% and 2.3 % in 2011
and between 0.6 % and 2.8% in 2012. Compared with the March 2011 ECB staff
macroeconomic projections, the range for 2011 has been revised upwards, while
the range for 2012 remains broadly unchanged.
ECB Keeps Rate Unchanged: Volker Wieland, chair for Monetary Theory and Policy at the CSF, joined CNBC to discuss the European Central Bank's decision to keep its rates unchanged at 1.25%:
US Jobless Benefit Claims:
The Department of Labor reported that in the week ending June 4, the figure for
seasonally adjusted initial claims was 427,000, an increase of 1,000 from the
previous week's revised figure of 426,000. The 4-week moving average was
424,000, a decrease of 2,750 from the previous week's revised average of
The number for seasonally adjusted insured unemployment during the week ending
May 28 was 3,676,000, a dip of 71,000 from the preceding week's revised level of
3,747,000. The 4-week moving average was 3,719,250, a decrease of 29,000 from
the preceding week's revised average of 3,748,250.
In New York Thursday, the Dow rose
88 points or 0.73% to 12,137.
The S&P 500 added 0.70% and the Nasdaq gained 0.30%.