March 9, 2017 / 2:25 PM / in 5 months

RPT-Bond yields, euro, shares jump as ECB says urgency for action waning

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LONDON, March 9 (Reuters) - Europe's benchmark government bond yield hit a one-month high and the euro firmed against the dollar on Thursday after the European Central Bank removed from its latest policy statement a reference to using all available instruments to prop up growth and inflation.

ECB chief Draghi told a news conference: "That sentence has been removed because the sense of urgency is not there." He said the Governing Council had also discussed removing a reference to lowering interest rates in its forward guidance.

German 10-year bond yields rose 5 basis points to hit a one-month high of 0.43 percent, while yields on low-rated euro zone bonds trimmed earlier falls.

The euro rose to the day's high at $1.0605, up more than half a percent on the day. Sterling also hit the day's high of $1.2192

Euribor money market futures across the 2017-2019 strip fell after Draghi's comments, reversing rises seen after the ECB statement earlier.

Euro zone money markets price in a near 60 percent chance of the ECB raising interest rates in January 2018.

European shares hit session highs, erasing earlier losses. Italy's FTSE MIB turned flat and Spain's IBEX hit an intraday high. The STOXX 600 banking index and euro zone banks index hit their highest of the day, up 0.8 percent and 1.9 percent. (Reporting by London markets team; Writing by John Geddie, editing by Nigel Stephenson)

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