“The eurozone economy has been fairly stable, although uninspiring, and markets have taken the UK’s decision to leave the European Union in its stride”.
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The central bank faces stubbornly low annual inflation of just 0.2% despite pumping €1 trillion in newly printed money into the banking system through bond purchases since March 2015.
In early trading, the Dow Jones industrial average was 50 points lower, or 0.3%.
In London, the FTSE 100 was up 0.18% at 6,858.70.
Facing anaemic growth and inflation, the ECB is buying 1.74 trillion euros worth of bonds, holding rates deep in negative territory and giving banks free loans, hoping to end the bloc’s almost decade-long economic malaise with an infusion of cheap credit.
Across the Atlantic, data from the Labor Department showed United States jobless claims unexpectedly fell to a two-month low last week.
Shares in Frankfurt fell 0.7 per cent, while Paris lost 0.3 per cent. The euro was worth $1.1239 late Wednesday in NY. Whitecap Resources Inc. and Encana Corp. increased at least 4.3 per cent.
Expectations for lower rates tend to weigh on the dollar by making it less attractive to yield-seeking investors.
Micro Focus was one of the top performers of the day.
A short-term market report from the U.S. Energy Information Administration pulled oil prices higher mid-day Wednesday after it found total production from outside the Organization of Petroleum Exporting Countries is expected to decline by 400,000 barrels per day this year and another 200,000 bpd next year. Chip makers also came under pressure, with Austria Microsystems, ASML and Dialog Semiconductor down 3-5.5 percent, after Apple, a major user of chips, released a new iPhone which analysts said was underwhelming.
USA stocks have been trading in a tight range in recent months as investors try to assess the outlook for US interest rates, the health of the USA economy and other issues. “Until we get the Fed out of the way, it’s going to be a market that remains indecisive and directionless”, said First Standard Financial chief market economist Peter Cardillo.
Recent weak economic data has underscored views the Federal Reserve may hold off on raising rates at its policy meeting this month. The Standard & Poor’s 500 index was down 0.2%. U.S. Treasury yields also rose, with benchmark 10-year Treasury notes down 14/32 in price to yield 1.587 percent, from 1.539 percent late on Wednesday.
Oil prices, already rising in response to a decline in USA production estimates, rallied further on Thursday after the European Central Bank stood still. Analysts had expected inventories to grow rather than shrink.
Brent crude was up 3.6 percent at $49.69, after hitting a peak of $49.93, US crude was last up 4.4 percent at $47.51 after hitting a one-week high of $47.58, marking the highest level since August 26 for both. Futures touched $47.75, the highest since August 26.
While the shaky outlook in Europe and the United States was not enough to spur the European Central Bank into action, it may prove a positive for riskier investments like the Chinese and other emerging markets if the end result is to stave off another rise in U.S. Federal Reserve interest rates.
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The ECB kept its deposit rate at -0.4 per cent, 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 per cent.
