People walk by an electronic stock board of a securities firm in Tokyo, Friday, Sept. 9, 2016.
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The Ecbkept its deposit rate at -0.4 percent, charging banks for parking cash overnight, and held the main refinancing rate, which determines the cost of credit in the economy, unchanged at 0.00 percent.
“Purchasing assets with higher duration would eliminate more interest rate risk from the portfolios of financial intermediaries, which would allow them to extend lending”, the five European Central Bank economists said in the paper.
Gold edged higher on Thursday on a weaker dollar, with investors looking to the outcome of a European Central Bank policy meeting later in the day for signs of economic stimulus.
Japan’s Nikkei slipped 0.2%, erasing gains after reports North Korea may have conducted a nuclear test.
In late morning trade, the 10-year bund yield was up 7.2 basis points to 0.006%, according to Tradeweb.
In London, the FTSE 100 was recently down 0.36% at 6,834.98.
Oil prices were on the rise, with USA -produced crude rising 1.8% to $46.35 per barrel.
Ian Kernohan, economist at Royal London Asset Management, said: “There was no great excitement in the European Central Bank meeting – interest rates, quantitative easing purchases and the March 2017 timetable remain as before”.
In the media conference following the announcement European Central Bank president Mario Draghi said he hoped Euro zone governments might finally step up and unleash some fiscal stimulus, referring to a recent announcement made by policymakers at the G-20 summit in China.
“Changes in non-OPEC production are significantly affected by changes in US tight oil production, which has high decline rates for production and relatively short investment horizons, making it among the most price-sensitive oil-producing areas”, the report read. South Korea’s president called the detonation, which Seoul estimated was the North’s biggest-ever in explosive yield, an act of “fanatic recklessness”.
Among risers, British software company Micro Focus surged 14.7%, the best-performing stock on the STOXX 600 index, after sealing an $8.8 billion deal for Hewlett Packard Enterprise to merge its non-core software assets with Micro Focus’s business. Elsewhere in Asia, the impact was less marked. Greater emphasis on fiscal policy supporting the economy could also see longer-dated yields rise.
The move was largely expected as analysts said the bank needed to save some monetary ammunition for a December meeting.
The nervy tone was set earlier in the day when Asian Marketsextended losses after North Korea conducted its fifth and most powerful nuclear test, while investors are keenly awaiting a speech on Monday by U.S. Federal Reserve policymaker Lael Brainard.
Energy stocks rose as oil prices climbed.
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Oil prices, already rising in response to a decline in USA production estimates, rallied further on Thursday after the European Central Bank stood still.
