Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: ECB signals rate cut

While you were sleeping: ECB signals rate cut

Feb 8 (BusinessDesk) – European Central Bank president Mario Draghi sent equities and the euro lower with comments that he's concerned about the recent strength of the region's common currency, signalling a potential rate cut.

Draghi made the comments after policy makers of the ECB decided, as was widely expected, to keep the central bank's benchmark interest rate steady at a record low 0.75 percent.

The euro has appreciated 6.7 percent over the past six months, the best performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

"The exchange rate is not a policy target, but it is important for growth and price stability and we certainly want to see whether the appreciation is sustained and will alter our risk assessment as far as price stability is concerned," Draghi told a news conference, according to Reuters

The euro was last 0.9 percent lower against the US dollar.

"What we had not expected today was for the ECB to actually tie directly the higher or stronger euro to the inflation outlook in the euro zone,” Sireen Harajli, a foreign- exchange strategist in New York at Credit Agricole, told Bloomberg. “We think that it does increase the odds of a rate cut. We don’t think it’s going to happen in March, but we think that March will be key in terms of assessing the situation.”

Policy makers at the Bank of England also kept their key interest rate on hold at 0.5 percent, and did not alter their target for bond purchases.

Europe's Stoxx 600 Index ended the session 0.2 percent lower than the previous close. Equities also fell in London and Paris, dropping 1.1 percent and 1.2 percent respectively.

Today EU leaders began a two-day meeting aimed at negotiating the bloc's next budget.

On the other side of the pond, Wall Street also declined amid disappointing earnings including from News Corp and as the latest economic data provided a reminder that the recovery remains fragile.

The latest labour data were positive. Weekly initial jobless claims slid last week, pushing the four-week moving average to the lowest level since March 2008.

However, a separate report showed that fourth-quarter productivity posted its largest decline in almost two years, and unit labour costs climbed a larger-than-expected 4.5 percent.

In afternoon trading in New York, the Dow Jones Industrial Average shed 0.76 percent, while the Standard & Poor's 500 Index fell 0.66 percent, and the Nasdaq Composite Index declined 0.60 percent.

Shares of News Corp were last down 2.7 percent after the company reduced its profit forecast. It reported after the closing bell on Wednesday in the US.

Apple shares edged higher after hedge fund manager Daniel Einhorn sued the iPhone maker in a bid to convince it to distribute more of its cash hoard to shareholders. Einhorn said he's been trying to persuade the company's board to create a new class of preferred shares with a high dividend.

Meanwhile, bonds are losing favour with some investors.

“I’m short long-term government bonds,” betting the securities will fall, Jim Rogers, investors and author of the book “Street Smarts,” told Bloomberg. “I plan to short more. That bull market, that’s a bubble.”

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Balance Of Trade: NZ Posts Trade Deficit In October On Falling Dairy Exports

New Zealand’s posted its largest monthly trade deficit for October in six years, while narrowing the shortfall from September, led by a fall in dairy exports to China while all main imports into the country rose. More>>

ALSO:

Gigatown Winner: Plenty Of Positives For Dunedin

Although the city has taken the Gigatown title, along with new ultrafast 1Gbps broadband and funding for $700,000 worth of UFB-related initiatives across the community, Mr Cull says Dunedin has gained so much more through its involvement. More>>

ALSO:

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news