Euro slips across the board after ECB cuts rates
The euro slumped broadly on Thursday, hitting a one-month low against the dollar after the European Central Bank cut its main interest rate to a record low and reduced its deposit rate to zero to help tackle the euro zone debt crisis.
Analysts said although the market had been positioned for a 25-basis-point-cut in the ECB'S main refinancing rate, the cut in the deposit rate - effectively encouraging banks to lend funds to each other overnight - caught some by surprise.
That view was reinforced after European Central Bank President Mario Draghi said at a press conference after the rate announcement that the ECB sees a weakening of growth for the euro zone and that downside risks to growth are materializing.
But Draghi said the ECB's bond-buying program and other such crisis measures are strictly temporary, resisting pressures to reactivate the plan to ease funding costs for countries mired in the euro zone debt crisis. [ECB RATES/BONDS]
The euro <EUR=> was last down 1.07 percent against the dollar at $1.2388, after falling as low as $1.2362. Against the yen, the euro was 1 percent lower at 98.98 yen <EURJPY=>.
The dollar posted a two-week high against the yen after U.S. employment data showed signs of hope for the labor market. The dollar was last up 0.06 percent at 79.88 yen <JPY=>.
Earlier in the session the euro briefly jumped after the Chinese central bank unexpectedly cut its benchmark interest rates in the latest attempt to protect the world's second-largest economy from signs of slowing growth.
But the main focus remained the ECB. Many market players said the rate cut would not tackle structural problems within the euro zone, and the single currency could come under further selling pressure.
The dollar also climbed to a one-month high against the Swiss franc <CHF=> and was last up 1.03 percent at 0.9690.
Wall St rally ends, caution before jobs report
U.S. stocks edged down on Thursday as economic stimulus measures by major central banks failed to excite investors before a U.S. jobs report expected to show tepid growth.
After the S&P 500 index's strongest three-day run this year, investors stepped back, leaving the broad index and the Dow modestly lower and the Nasdaq essentially flat.
Trading volume was light after the July 4th U.S. market holiday and before the government's June nonfarm payrolls report on Friday.
The data is expected to show Europe's debt crisis is weighing heavily on the U.S. economy. Analysts expect the economy added 90,000 jobs last month, a level that won't make much of a dent in the grim unemployment situation.
Financial stocks weighed on Wall Street, with Dow component JPMorgan Chase <JPM.N> falling 4.2 percent to $34.38 and Bank of America Corp <BAC.N> off 3 percent at $7.82.
The S&P Financial index <.GSPF> and the KBW Banks index <.BKX> fell about 1.5 percent. Financial shares have often taken the brunt of selling during the European crisis, though they experienced a good run during the recent rally.
Wall Street was little impressed by the actions in China, Europe and Britain to loosen monetary policy, which sent the euro lower against the U.S. dollar.
Stocks also derived little benefit from reports on Thursday showing hopeful signs about U.S. hiring by private employers. Markets give more weight to the broader monthly report from the U.S. Labor Department.
The Dow Jones industrial average <.DJI> was down 47.15 points, or 0.36 percent, at 12,896.67. The Standard & Poor's 500 Index <.SPX> was down 6.44 points, or 0.47 percent, at 1,367.58. The Nasdaq Composite Index <.IXIC> was up 0.04 point at 2,976.12.
Losses in the Nasdaq were limited by Apple Inc <AAPL.O>, which rose 1.8 percent to $609.94, and Google Inc <GOOG.O>, up 1.4 percent at $595.92.
Gold falls after cenbank easing, eyes US payrolls
Gold fell on Thursday on a dollar rally and frustrations over a lack of more aggressive market stimulus from central banks after China, Europe and Britain eased their monetary policies.
Bullion, which has tumbled several times this year after the Federal Reserve did not mention easing, was under pressure again after the top three central banks loosened monetary policy and signaled a growing level of alarm about the world economy.
Gold's inflation-hedge appeal was weakened by the prospect of a global economic slowdown.
Still, gold has gained almost 4 percent since last Friday on hopes of more Fed action after data showed U.S. manufacturing shrank in June for the first time in nearly three years.
Some dealers also stayed on the sidelines ahead of Friday's closely watched U.S. nonfarm payrolls report.
Spot gold <XAU=> was down 0.5 percent at $1,607.69 an ounce by 2:27 p.m. EDT (1827 GMT).
U.S. gold futures for August delivery <GCQ2> settled down $12.40 at $1,609.40 an ounce. Trading volume after Wednesday's U.S. Independence Day holiday was about 10 percent below average, preliminary Reuters data showed.
Oil Drops as ECB’s Draghi Says Economic Risks Remain
Crude dropped in New York after the dollar rose against the euro as European Central Bank President Mario Draghi said economic risks remain after the bank cut rates to a record low.
Futures fell 0.5 percent as the dollar reached a one-month high against the common currency. Draghi said there were “downside risks†to the euro-area’s economic outlook. Prices briefly advanced after an Energy Department report showed that U.S. crude supplies fell 4.27 million barrels to 382.9 million last week, the biggest decrease since December.
Crude for August delivery fell 44 cents to settle at $87.22 a barrel on the New York Mercantile Exchange. Prices are down 12 percent this year.
There was no floor trading yesterday because of the U.S. Independence Day holiday. Transactions since the last close were booked with today’s trades for settlement purposes.
Some “downside risks to the euro-area economic outlook have materialized,†Draghi said at a press conference in Frankfurt after lowering the main refinancing rate and the deposit rate by 25 basis points to 0.75 percent and zero respectively. “Economic growth in the euro area continues to remain weak with heightened uncertainty weighing on both confidence and sentiment,†he said.
Nikkei likely to slide after ECB rate cut fails to inspire
Japan's Nikkei share average is likely to slide on Friday after fresh monetary easing in Europe and China failed to boost investor appetite for risk, with market players bracing for U.S. jobs data later in the day.
The European Central Bank cut rates to a record low of 0.75 percent, while China and Britain also loosened policy, but share prices in Europe and on Wall Street dipped.
The Nikkei fell 0.3 percent to 9,079.80 on Thursday, coming off a two-month closing high marked on Wednesday and retreating ahead of its 75-day moving average at 9,158.
A fall in the euro against the yen after the ECB rate hike could hit exporters with high exposure to Europe such as Canon <7751.T> and some other precision machinery makers.
Seoul shares seen holding as investors eye Samsung, U.S. data
Seoul shares are seen mixed on Friday morning, as investors wait on fresh jobs data from the United States despite action by central banks to boost the flagging global economy.
Industry bellwether Samsung Electronics Co <005930.KS> estimated its April-June operating profit at a record 6.7 trillion won ($5.9 billion), in line with forecasts, powered by
strong sales of its Galaxy smartphones
The European Central Bank cut its main refinancing rate to a record low of 0.75 percent on Thursday as widely expected, while remaining coy on additional "non-standard" measures such as bond-buying or flooding banks with more liquidity.
In a surprise move by Beijing, Chinese policymakers lowered its lending rate by 31 basis points to 6 percent following another unanticipated rate cut last month.
Investors will be closely monitoring Friday's U.S. non-farm payrolls data for the month of June.
The Korea Composite Stock Price Index (KOSPI) <.KS11> ticked 0.06 percent lower to close at 1,875.49 points on Thursday.
Hong Kong shares seen weak, China banks under pressure
Hong Kong shares are poised for a tepid start on Friday despite central bank easing in China and in Europe as investors remain concerned that global economic growth may be worse than feared.
Chinese banking shares, which carry hefty weights on Hong Kong benchmark indices are seen under pressure on worries that the People's Bank of China's second cut in interest rates in two months will further erode net interest margins.[ID:nL3E8I53C9]
The Hang Seng index <.HSI> ended up 0.5 percent on Thursday helped largely by a late-session rally in financials and local bluechips such as Cheung Kong Holdings <0001.HK>.
Elsewhere in Asia, Japan's Nikkei <.N225> was little changed while South Korea's KOSPI <.KS11> was down 0.4 percent as of 0045 GMT.
Source : Reuters
