Yesterday, the ECB took the unprecedented step of taking interest rates into negative territory.
Draghi’s decision came after the close of European markets, but U.S. stocks rallied yesterday.
Today, its been Europe’s turn to run higher.
Leading the gains are markets on the European periphery, namely Italy and Spain, with both countries seeing strength in both their bond and stock markets.
Italian 10-year bonds are trading 9 basis points, or 0.9%, lower than yesterday at 2.84%. Spanish 10-years are down 8 basis points to 2.74%, according to data from Bloomberg.
Spain’s IBEX stock exchange is up more than 1.6%, and the Spanish FTSE MIB Index is up 1.4%.
Today’s action in Italian and Spanish bonds comes amid a strong year across the European periphery, including Portugal and Greece, which have seen yields on 10-year government bonds drop by more than 2% and 3%, respectively.
Markets in the U.K., France, and Germany are also stronger, as the market seems to be taking Draghi’s bold actions seriously.