The European Central Bank pledge to keep its aggressive stimulus policy at least until the end of the year, but markets leap higher as it signals there's less of a need to prop up growth and inflation in the euro zone. David Pollard reports.
SOUNDBITE (English) MARIO DRAGHI, ECB PRESIDENT, SAYING: "A very substantial degree of monetary accommodation is still needed ..." The euro zone's looking up. Sentiment at a six-year high, trade rebounding, services and manufacturing rising, unemployment down. Even headline inflation hit the ECB target rate last month. But .... SOUNDBITE (English) MARIO DRAGHI, ECB PRESIDENT, SAYING: "Underlying inflation pressures continue to remain subdued." Core or underlying inflation - which excludes volatile fuel and food prices - isn't following suit. Mario Draghi and his policymakers standing firm on stimulus - even in the face of German pressure to start winding down their 2.3 trillion euro QE programme. (SOUNDBITE) (English) NICK PARSONS, GLOBAL HEAD FX STRATEGY, NAB, SAYING: "Although they don't explicitly target core CPI, it's very clear that a rate of 0.9 per cent is a very, very long way away from where they'd like it to be." SOUNDBITE (English) MARIO DRAGHI, ECB PRESIDENT, SAYING: "We are ready. The euro is irrevocable ...." Draghi played down fears over a break-up of the euro zone - but politics may also be dominating ECB thinking. After a Dutch election next week - which could see a lurch to the right - France goes to the ballot box in April. Centrist Emmanuel Macron expected to win as president - if the opinion polls are accurate. SOUNDBITE (English) JAMES HUGHES, CHIEF MARKET ANALYST, GKFX, SAYING: "We've seen polls in the past, with Donald Trump and with Brexit, not necessarily paint the whole picture. So I think there is always that worry." But growth in the meantime, isn't such a worry. Draghi upgrading 2017 GDP from 1.7 to 1.8 per cent. The headline CPI forecast jumping from 1.3 per cent, to 1.7. And despite his stance, Draghi also signalled there could be less urgency for policy action in the future. Driving bond yields and the euro up, European shares to session highs.