“If markets expected another thing, that’s their view, but I would like to invite them to look…at the links between what we are doing and what is happening in financial markets and the real economy and to have confidence that these links will be reinforced by the measures taken yesterday”, Jan Smets said.
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Some of the volatility was laid at the doorstep of ECB President Mario Draghi, who had seemed to suggest on more than one occasion that the bank could increase its monthly purchases of securities.
“It’s very possible that they are back at it next year”, said Mr. Osborne.
– said it would re-invest principal payments on the bonds it has bought. “This time, he didn’t, and he disappointed the market quite a bit”, said Bob Michele, head of global fixed income at JPMorgan Asset Management. The euro edged up to $1.0940 from $1.0939 after jumping 3 per cent on yesterday’s news. Investors had been betting against the euro ahead of the announcement, expecting that more central bank stimulus would put pressure on the currency.
“People aren’t sure where to put their money so everyone just went to cash”, said J.J. Kinahan, chief strategist at TD Ameritrade.
Since then European stock markets have climbed steadily in anticipation of an early Christmas present from the central bank. Germany’s DAX plunged 3.6 percent, its biggest drop since September.
Other oil services companies fell only marginally, including Halliburton and Schlumberger, which lost 0.3 per cent and 0.1 per cent, respectively.
The ECB is also united in its readiness to do more stimulus if necessary.
Its rate cut of 0.10 percentage point, to -0.30 per cent, was smaller than a 0.15 to 0.20 percentage point cut many traders expected.
Hong Kong was 0.8 percent off by the end. The move from Frankfurt was less impressive than previously expected, leading to declines in the dollar against the euro, whilst also signalling the ever growing divergence between the two banks. The yield on the 10-year Treasury note jumped to 2.32 percent, up sharply from 2.18 percent the day before.
Investors are now turning their attention to the U.S. jobs data, which is likely to cement expectations that the Federal Reserve will hike interest rates later this month, barring surprisingly weak readings. In comments Wednesday, Fed Chair Janet Yellen gave an upbeat assessment of the economy’s progress since the Fed’s last meeting in October, describing it as in line with its expectations for the labor market and inflation.
Taiwan’s central bank jumped into the market, as it has done nearly every session recently, to pick up the US dollar and slow down the pace of the Taiwan dollar’s appreciation for the sake of the country’s exports, they said.
Economists forecast that US employers created 200,000 jobs in November, and the unemployment rate remained steady at 5 percent.
Moving away from interest rate decisions, the biggest factor affecting inflation has been the determination of Saudi Arabia to drive oil prices lower, regardless of objections from non-Arab OPEC members.
Japan’s Nikkei 225 dropped 2.3 per cent to 19,475.86 and South Korea’s Kospi lost 0.8 per cent to 1,979.06.
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The euro-zone economy grew at an annual rate of 1.2 per cent in the third quarter – compared with a 2.1 per cent rate in the US.
