European Central Bank gets ready to pull the plug on stimulus scheme

17 June, 2018, 11:41 | Author: Lora Ball
  • Drama Over?       Italian two-year yields though not back to pre-crisis levels are much lower than in late May

The ECB said the monthly pace of its net asset purchases would be halved to 15 billion euros from September until the end of December 2018, at which point purchases would end.

The yen was 0.2 per cent weaker at ¥110.56 per dollar.

'China is unwilling to have a trade war, but the Chinese side has no choice but to strongly oppose this, due to the United States' myopic behaviour that will harm both parties.

The dollar index .DXY dipped 0.3 percent to 93.391 after briefly rising to 94.028 on Wednesday, with analysts citing the fact that the rate rises were probably priced into the US currency and a shift in focus to the European Central Bank.

ECB President Mario Draghi declined to give more detail about the timing of rate moves in a news conference after the policy meeting, this time held away from the bank's Frankfurt headquarters in the Latvian capital Riga. Stocks in Taiwan were lower while in Indonesia, markets were closed for a holiday.

The euro was headed for its worst weekly loss in 19 months after the European Central Bank signalled on Thursday that it would keep interest rates at record lows into at least mid-2019, even as it pledged to end its massive bond purchase scheme by the end of this year.

An official announcement including a final list of impacted products is expected on Friday. The program is credited with raising inflation to the ECB's target of just under 2 percent.

Societe Generale macro strategist Kit Juckes said he foresaw further pain for the euro in the near-term. The Dow Jones industrial average slipped 25.89, or 0.1 percent, to 25,175.31, and the Nasdaq composite rose 65.34, or 0.8 percent, to 7,761.04, a record. More evidence arrived that the USA economy is improving, meanwhile, which helped send the S&P 500 to its fourth gain in the last five days.

More news: Hearn: Joshua-Wilder May Go To Wembley in October, November

The European Central Bank (ECB) has announced that it will end its bond-buying stimulus programme this year.

In Asia later today, the Bank of Japan will conclude its 2-day policy session.

Italy's new populist government is a coalition between the anti-establishment 5-Star Movement and the anti-immigration League.

The decision represents a belief in the central bank that the eurozone economy, after years of weakness and recession, "is now sufficiently robust that it can start to withdraw monetary stimulus" says The Independent.

"I think the biggest concern at the moment, more than talk about trade, is the tightening of monetary conditions in emerging markets caused by a stronger dollar", said Michael Hewson, chief markets analyst at CMC Markets in London, noting the Federal Reserve's forecast for a total of four interest rate rises in 2018.

Oil prices were little changed as investors eyed a key Organisation of Petroleum Exporting Countries meeting in Vienna.

West Texas Intermediate crude oil futures were down 0.2 per cent at US$66.76 per barrel; Brent was down 0.6 per cent at US$75.49.

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