ST: Euro Slumps on Gulf Between Fed and European Central Bank Policy
Oil prices fell on profit-taking while copper prices bounced back from one-month lows. The CSI 300 index of largest listed companies in Shanghai and Shenzhen closed 1.6 per cent lower and the Shanghai Composite index lost 1.7 per cent. The impact on the euro area of a potential further slowdown in China ultimately hinges on the extent to which this slowdown spills over to other emerging markets more generally, and the degree to which the resulting loss of confidence affects global financial markets as well as global trade, the bank added. Because of that, numerous world's central banks, including the Fed, had put off potential rate hikes as a more "expensive" currency discourages export trade. Germany's DAX index was down 0.1 percent, underperforming a 1 percent rise of the FTSEurofirst 300. "The markets have been yearning for a period of political stability in Turkey for quite a few time now". "It's all about the interest rate outlook", said Stuart Bennett, London-based head of Group-of-10 currency strategy at Banco Santander SA. In turn, that leaves us favouring a stronger dollar for the coming week, especially vs. the euro: the greenback opens at $1.1025 and $1.5450 against the euro and pound respectively, a combination that leaves Eur/GBP at around 71.4p as the first session of the European trading week kicks off. Euro-zone inflation returned to zero per cent (from a previous reading of -0.1 per cent), unemployment remains elevated at 10.8 per cent and growth in the second quarter was a meagre 0.4 per cent. The release of the third quarter GDP reading on November 13 will be the final piece of the puzzle before Mr Draghi has all he needs to unleash another round of quantitative easing measures when the European Central Bank next convenes on December 3. In the Eurozone, despite the ECB's latest rhetoric, the Euro was pushed higher as markets reassessed Mario Draghi's latest comments. The yen gained 0.1 per cent to 120.53 per dollar. Euro zone bond yields rose. Government bond purchases by the European Central Bank have helped reduce Cypriot bond yields on the secondary market, allowing the Ministry of Finance to issue its new €1 billion 10-year bond. USA crude fell 0.4 percent to $47.73 a barrel after rallying 4 percent on Tuesday. The bank is forecast to keep rates on hold at 0.50% and asset purchase target at GBP 375 billion. Steelers Lounge http://steelerslounge.com/2015/11/euro-slumps-on-gulf-between-fed-and-ecb-european-central/43815/
