Published: Sun, June 17, 2018
Money | By Armando Alvarado

FxWirePro: Market more focused on European Central Bank than Fed

FxWirePro: Market more focused on European Central Bank than Fed

The European Central Bank announced on Thursday that it would wind up its €2.4tn bond-buying programme at the end of 2018, following the US Federal Reserve and the Bank of England in normalising monetary policy.

The pan-European STOXX 600 index raced back into positive territory after a morning in the red, and Wall Street opened higher [.N], though basic resources stocks stayed down.SXPP after weak data from big metals consumer China. France's CAC-40 was up 1.4pc and Germany's DAX ended the session nearly 1.7pc higher.

Euro investors appeared to focus more on the statement from the bank's governing council that key ECB rates are to remain at their present levels "at least through the summer of 2019".

The yield spread between USA 30-year bonds and US 5-year notes narrowed to the flattest level since January 2012 after the Fed decision on Wednesday.

The yield on Italy's 10-year bonds fell 14 basis points to 2.60 percent, the lowest level since June 5. The continent faces a developing trade war with the United States, a populist challenge from Italy's new government and softening export demand.

On the latter, he said there had been no "significant" contagion, and nothing like the turmoil seen when Greece's future in the euro was teetering in the balance.

"I think its pragmatic for the Fed to take these moves, because if you are not going to make them now, when are you going to take them", Kully Samra, European managing director at $3 trillion USA asset manager Charles Schwab, said. U.S. President Donald Trump will meet with his trade advisers later to decide whether to activate the tariffs, a senior administration official said on Wednesday. But Japan's Nikkei average added 0.5 percent.

Dhawan's ton help India post 158/0 at lunch vs Afghanistan
Rahane, who is standing in as captain for Kohli, said his side will have to fight for victory. Ireland kept Pakistan under pressure nearly throughout their inaugural Test in Dublin.

July West Texas Intermediate crude rose by 25 cents, or 0.4%, to settle at $66.89 a barrel on the New York Mercantile Exchange, the highest finish since May 31.

The dollar index .DXY , which measures the greenback against a basket of six major currencies, was little changed on the day at 94.761.

In Asia overnight, surprisingly soft Chinese retail sales and investment data had hit sentiment. The benchmark main refinancing rate remains at zero and the deposit rate at minus 0.4 per cent. For the week, the index was up 1.3 percent, its best weekly performance in seven weeks. Shares in South Korea and Taiwan fell over one percent.

As the stimulus is ended and then withdrawn over a period of years, those effects will go into reverse, though investors do not seem too anxious just yet: the DAX rallied 1.7 percent on Thursday. Russia's time zones mean there will be more matches during European or US and Latin American trading hours than any previous tournament.

Volume on USA exchanges was 6.75 billion shares, compared with the 6.70 billion average for the full session over the last 20 trading days.

Among commodities, China-sensitive industrial metals sagged [MET/L] but gold and other precious metals made ground.

The Brazilian currency led gains in Latin American after the central bank announced it would extend a currency intervention plan while the Argentine peso slumped to a record low after the resignation of its central bank president.

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