Draghi Cracks East Europe Shield Against Fed Rates as Bonds Drop
- Disappointing ECB stimulus sparks declines in emerging Europe
- Selloff to be short-lived as ECB still accommodative: SEB
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Mario Draghi planted seeds of doubt that his stimulus measures will shield investors in eastern Europe from Federal Reserve interest-rate increases.
Yields on Poland’s 10-year notes rose the most since September 2014 and Hungary’s forint suffered its biggest loss in a month after the European Central Bank president shocked markets on Thursday. By refraining from expanding the size of a 60 billion-euro ($65 billion) bond-buying program and cutting interest rates by less than some economists forecast, the ECB threatens to spark more outflows, according to Royal Bank of Scotland Group Plc.