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LONDON, March 9 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
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)