ECB keeps rates unchanged; euro and bond yields fall
TLT•The European Central Bank left interest rates unchanged, while the euro fell 0.2% and two-year government bond yields fell sharply. The ECB cited rising inflation risks from energy costs, and Christine Lagarde resigned.
1. Rates held steady
The European Central Bank left interest rates unchanged on Thursday, a widely expected decision. It said inflation risks were rising because of surging energy costs, which could strengthen market bets on a December rate hike.
2. Euro and yields fall
The euro fell 0.2% to around $1.113, its lowest level since last May, while rate-sensitive two-year government bond yields fell sharply. Europe's STOXX 600 was up 0.95%.
3. Lagarde resigns
ECB chief Christine Lagarde resigned, ending months of speculation about her future. Market commentators said her departure adds uncertainty, while some expected policy continuity and said tighter financial conditions could weigh on inflation and growth.
