The European stocks experienced on Thursday the sharpest fall in 4 months from the 3-months highs after the ECB decisions were revealed. The EUR/USD edged up by 3.1% which is its record daily increase since March 2009. Euro slid to $1.0523 early in the day but later rebounded to $1.0981. Analysts and markets were anticipating more aggressive measures of monetary stimulus from the ECB. The base rate remained unchanged at 0.05%. As for the parameters of the QE programme, its volume was not expanded despite the expectations but Mario Draghi said it would be prolonged for six months. As a result, the markets reacted negatively on these scarce stimulating measures. The pan-European FTSEurofirst 300 fell 3.3% which is its record daily fall since late August although it reached the 3-month highs ahead of the ECB meeting. The UBS analysts believe the yesterday’s decisions left the room open for further monetary easing but state that judging by ECB actions further steps are likely only in case of extremely weak inflation or the worsened prospects of economic growth. The Euro STOXX 50 index and German DAX 30 index lost 3.6% each reacting on the surge of the EUR/USD pair. The Britain’s FTSE 100 outperformed having lost 2.3% yesterday. Today the European stock indices continue extending losses.
Nikkei fell 2.2% today to 19’504 which was its biggest daily fall since late September. Active shorts in US dollar against the euro led to the dollar losing its value against other major currencies too. For instance, the USD/JPY fell to 122.23 while the EUR/JPY edged up 2.5%. The Chinese CSI 300 lost 1.6% with yuan getting stronger against the dollar and reaching 6.39 in the spot market.
Oil edged up by around 3% yesterday as traders were hedging positions ahead of today’s OPEC meeting. On Thursday the Brent oil prices reached the $43.92 a barrel bouncing up from the 3-month low of $42.43 hit on Wednesday.
Gold edged up too by 0.8% on Thursday amid the US dollar weakening closing at $1,062.20.
Copper continues hovering around the 6-year low amid the expected interest rates hike in the US and the slowed demand for the metal from China. The three-month London copper is traded at $4,560.50 a tonne.
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