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

 

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news