Gold slips as ECB's Draghi lifts the U.S. dollar

Are S&P 500 EUR  USD Unconcerned by Trade Wars or Shell-shocked

Are S&P 500 EUR USD Unconcerned by Trade Wars or Shell-shocked

However, in its communiqué it has eliminated a reference to a possible increase in this procurement programme if situation is distorted, which is interpreted as a change of discourse towards gradual withdrawal of stimulus and normalization of monetary policy.

European and U.S. stocks rose on Thursday as traders took a break from worrying about a global trade war and focused instead on the ECB's plans to end its €2.5-trillion stimulus programme. There are no changes compared to November, when it was chose to reduce asset-buying program in half and lengn it until September. But its statement omitted an earlier promise that it could increase its bond-purchase stimulus in size or duration if the economic outlook worsens.

That prompted the euro to give up the gains it posted after the ECB's post-meeting statement, while the lack of any signals of broader changes to the policy stance also pushed bond yields in Germany and France off two-week highs.

Despite the longest run of economic growth in Japan for 28 years, BoJ Governor Haruhiko Kuroda made clear on Friday that talk in the market of an exit to the programme is premature.

With the strong euro already exerting pressure on Europe's exporters, the last thing European Central Bank policymakers wanted to hear was President Trump planning to enact trade tariffs in the US. Mr Draghi also referred to other risks to growth, including the steel and aluminium tariffs being introduced by the Trump administration, of which he was critical.

With regard to inflation expectations, the European Central Bank foresees the annual Harmonised Index of Consumer Prices (HICP) inflation at 1.4 percent in 2018, 1.4 percent in 2019 and 1.7 percent in 2020.

Interest rates on the marginal lending facility and on the deposit facility will remain steady at their current level of 0.25 percent and -0.40 percent, respectively, the European Central Bank said.

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Draghi cautioned that the "rising protectionism" could harm growth in the eurozone.

German manufacturing orders fell more than expected (http://www.marketwatch.com/story/german-manufacturing-orders-drop-miss-forecasts-2018-03-08) in January, dropping 3.9%, compared with forecasts of a 1.5% decline.

Incoming information, including our new staff projections, confirms the strong and broad-based growth momentum in the euro area economy, which is projected to expand in the near term at a somewhat faster pace than previously expected.

The sterling declined by 0.2 percent to 1.3872 against the dollar, after losing nearly a third of percent earlier in the session to 1.3861. Comex April gold futures last traded at $1,321.2 an ounce, down 0.48% on the day.

Most bond yields across the single currency bloc were 1-2 basis points higher in early trade, reflecting some market caution ahead of closely-watched US monthly jobs data due later in the day. It expects inflation to pick up to an average of 1.7 percent in 2020, which still undershoots the target of just below 2 percent.

Looking ahead the Euro US Dollar exchange rate may tumble again later this afternoon as the US publishes its latest payroll figures. In antipodean currencies, aussie/dollar and kiwi/dollar retreated to 0.7800 (-0.29%) and 0.7263 (-0.29%) respectively on the back of potential trade risks as Australia and New Zealand are highly exposed to commodity prices which would get into a bearish run if the United States tariff measures materialize. We think we would need to see an extremely weak report to dissuade the market that Fed will raise rates on at least three occasions in 2018.

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