The ECB decision shakes global markets today

2018/06/15 01:08

(Encyclopedia of this Day News | Iraq News  ) - Direct: disclosed the ECB 's monetary policy decision to be the most prominent event at the end of trading on Thursday, in a move that point to continue to move away from accommodative policies in general also means the recovery of economic growth in the euro zone.

The ECB's decision to end the quantitative easing program, as well as hints about the region's interest rate, caused a sharp loss for the euro to fall below $ 1.16.

The European Bank's move supports the general trend of moving away from monetary easing policies that have been followed for many years in the wake of the global financial crisis.

On the other hand, emerging market currencies continue to suffer from the strength of the dollar and the decisions of the Fed yesterday, in addition to the sharp losses in the currency of Argentina.

Decision of the European Central

The European Central Bank (ECB) announced today that it will continue to buy bonds of 30 billion euros until September, reducing their value to 15 billion dollars during the last three months of the year.

The European Bank said next December will be the end date of the asset purchase program.

The ECB also decided to fix interest rates on refinancing, lending and deposits at 0.00%, 0.25% and 0.40%, respectively.

ECB President Mario Draghi said the decision to keep interest rates at their current levels would continue until the summer of 2018.

The outlook of the new euro zone helped push the EUR down sharply, boosting green paper gains as the US dollar recorded its best daily performance since 2016.

Business conditions

Although US President Donald Trump continued his path on imposing tariffs on US imports, his efforts in the nuclear disarmament process boosted his candidacy for the Nobel Peace Prize.

The US president said he would face China very strongly in the coming weeks on trade issues, which would boost reports of China's tariffs on Friday.

On the other hand, EU governments support the retaliation against the US decision by imposing tariffs on US products, according to press reports.

Canada's foreign minister also said her country was serious about imposing retaliatory tariffs against US goods.

Global Stock Exchange

European bourses reacted positively to the central bank's monetary policy decision, while technology sector gains pushed the Nasdaq index to a record high.

At the end of Thursday's session, Wall Street rallied to record a new record high with technology gains, despite the Dow's failure to catch up with the greenback.

During the session, US company Netflix rose to its highest level, surpassing 100% gains since the beginning of the year.

In the European market, European equity indexes rose at the end of trading following the central bank's decision to set a date for the end of the monetary policy program.

Japan's stock indexes fell after the Fed's decision amid trade concerns.

Economic indicators

Today saw the release of a number of important economic data in the US as well as indications that China's economy has lost momentum this year as the royal wedding has had positive effects on UK retail sales.

In the United States, import prices in May rose year-on-year at their fastest pace since February 2017, while jobless claims fell in contrast to estimates.

While US retail sales exceeded expectations in May.

In Europe's second largest economy, retail sales in May rose more than expected due to good weather and a royal wedding.

While China's economy faces a tough challenge, with economic data on industrial production, fixed income investment and retail sales below expectations.

Emerging market losses

The decision to raise the US interest rate contributed to further suffering within emerging currency markets, all of them in the red range with sharp losses in the Argentine currency.

The Federal Reserve decided to raise the interest rate for the second time this year to between 1.75% and 2% and increased the rate of increase in 2018 to be 4 times instead of 3 previous increases.

Argentina's currency fell sharply against the US dollar by nearly 7% amid doubts about the country's central bank's ability to withstand peso losses.

Argentina has unveiled a plan to implement IMF demands, including cuts in subsidies and a freeze on jobs.

Commodity and metal market

Investors are waiting for the Organization of the Petroleum Exporting Countries (OPEC) to announce next week a cut of 1.8 million bpd by the end of 2018.

Saudi Arabia has expected a gradual deal to increase crude production after reports that Riyadh has offered multiple visions to boost oil production.

US oil production continues to rise to weekly record highs of 10.9 million bpd, approaching Russian levels as the largest crude producer.

For its part, the US Energy Information Administration raised the oil price estimates over the next year, but kept the average price of "Brent" this year.

As OPEC's decision awaited, the price of US crude rose at the settlement level.

As for metals, the price of gold rose at the highest level in a month at the settlement thanks to the week of global monetary policy decisions.



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