As we have noted on previous occasions, these monetary and credit developments are considered to have been driven mainly by the low level of interest rates, as well as by the pick-up in economic activity in the euro area. The initial reaction of euro area financial markets to the Eurosystem’s monetary policy move of last month was favourable.
In particular, this was signalled by the continued decline in long-term government bond yields and the immediate substantial reduction in market uncertainty regarding the 1  BIS Review 132/1999  evolution of future long-term interest rates.