European Central Bank to end crisis-era stimulus programme in December

All Eyes are on Powell

All Eyes are on Powell

Futures markets are pointing to stronger opening moves across the region.

Garland Hansmann, portfolio manager, Investec Multi-Asset Credit, said that although the European Central Bank left key interest rates unchanged, this came as a surprise to markets with a more accommodating than expected stance.

The stronger-than-expected retail sales data "smashed expectations", Cote said. The program will run at the current pace of 30 billion euros ($35 billion) per month until the end of September, and at a rate of 15 billion euros in the ensuing three months.

"Despite the ECB signalling an upcoming end to QE, the market has interpreted its new time-specific forward guidance dovishly and sent the euro packing", said Miles Workman, an economist at ANZ Bank New Zealand, in a note.

The common currency shed 1.9 percent after the rate comments in its sharpest daily fall in nearly two years.

Canadian dollar edged lower against its US counterpart on Thursday as the greenback broadly climbed and after Italy added to Canada's uncertain trade outlook, saying it will not ratify the European Union's free trade accord with the country. Officials revised their inflation forecast for the next two years from 1.4% previously to 1.7%.

For years since the Great Recession, central banks around the world have thrown massive amounts of stimulus at markets, chiefly through the purchase of billions of dollars of bonds each month.

In the post-meeting press conference, the ECB President Mario Draghi reinforced the statement and said that the governing council did not discuss when to raise rates, citing an undeniable rise in uncertainty due to geopolitical reasons. With those sorts of rate differentials, it is hard to argue how the euro can go any other way but down.

The pan-European FTSEurofirst 300 index rose 1.40 percent, buoyed by big gains in interest rate-sensitive sectors like autos and utilities.

The euro was a shade lower at 127.900 yen after dropping 1.7 per cent overnight.

Germany's DAX .GDAXI and France's CAC40 .FCHI led the European stocks rebound as the euro tumbled back under $1.17 from well over $1.18 EUR=EBS.

Brent and US crude futures traded at $76.83 and $66.67 a barrel respectively, to extend their recovery from eight-week lows touched last week.

At least on the immediate horizon, little appears to stand in the way, given the government´s $1.8 trillion in combined tax cuts and planned spending. A move below 1.32000 targets a test of the trend line support from the 2017 lows which comes in around the 1.3100 area.

Shares in South Korea and Taiwan fell over 1.8 and 1.4 percent, Japan's Nikkei dropped 1 percent while mainland China's Shanghai composite index hit a 20-month closing low.

USDJPY - while above the 200-day MA remains on course for a retest of the May highs at 111.30.

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