We didn’t see any strong signal that another easing of monetary policy is likely in the months to come. Asian shares mostly declined, catching up with Thursday’s losses in the USA and Europe, while futures pointed to a 0.1% opening dip for the S&P 500.
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After a mixed bag of data over the past month, with the fragile side of the euro zone economy underlined by poor German industrial orders this week, many market players had thought the European Central Bank might push ahead early with yet more stimulus moves.
ANALYST’S TAKE: “Whatever the case, ECB’s inaction reinforces the consensus from the recent G-20 meeting that monetary policy by itself can not lead to a balanced growth, implicitly hinting that fiscal policy needs to complement”, Bernard Aw of IG said in a commentary.
The Shanghai Composite Index added 0.2 per cent. Data showed China’s factory-gate deflation eased for an eighth straight month signalling less need for the central bank to ease further.
After the decision was released, President Mario Draghi spoke at the post-decision press conference and provided more much more color to the ECB’s thinking.
It would have been a substantial shock if either of those rates changed on Thursday, but markets in Europe and across the world will now be waiting to hear what European Central Bank president Mario Draghi says when he answers questions from journalists later this afternoon.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.4 percent from Thursday’s 13-month high, mirroring the slide in the MSCI’s all-country world index .MWD00000PUS .
The lack of action was despite still subdued eurozone growth and a risky outlook, for which Draghi said the UK’s vote to leave the European Union was partly responsible.
Micro Focus was one of the top performers of the day.
In commodities, Brent crude oil gave back some of Thursday’s rally, and last traded down 1.3% at $49.35 a barrel. The dollar touched a low of 94.465 against a basket of major currencies and was last off 0.16 per cent at 94.805. Brent crude, used to price worldwide oils, lost 67 cents to $49.32 in London.
Overnight on Wall Street, the S&P 500 .SPX lost 0.22 percent, weighed by a 2.6 percent fall in Apple AAPL.O on disappointment over its latest iPhone, though gains in energy shares .SPNY offset losses in most other sectors. In currency markets, the dollar weakened to 101.65 yen from 101.75 on Wednesday.
Hong Kong’s Hang Seng Index climbed 0.4 per cent to the highest level since Aug 2015.
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“This assessment is broadly reflected in the September 2016 European Central Bank staff macroeconomic projections for the euro area, which foresee annual real GDP increasing by 1.7% in 2016, by 1.6% in 2017 and by 1.6% in 2018”.
