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

 

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Scoop Business: ComCom Charges Hawkins’ Finance Companies Over Debt Recovery

The Commerce Commission has filed criminal proceedings against two finance companies run by former 1980s high-flyer Allan Hawkins over their debt recovery practices. More>>

ALSO:

Science Media Centre: The Big Science Stories Of 2014

It was a dramatic year for science, one that witnessed a severe outbreak of Ebola in West Africa and an historic mission to land a space probe on a comet. On the home front... headlines with animal testing for 'legal highs', 1080 use to tackle increased pest numbers and court action over genetically modified organisms among the most-covered stories. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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