ECB QE vs. Fed Tightening, Commodities Under Pressure
November 23, 2015 8:07 am
US equity markets were buoyant on Friday, with the Dow Jones Industrial Average closing up 0.51% @ 17 823.81, the SP 500 adding 0.38% @ 2 089.17 and the Nasdaq closing 0.62% higher @ 5 104.92. The SP 500 clocked its best week in almost a year, while Europe’s main stock index enjoyed its strongest week in a month.
Amid high expectations that the European Central Bank will induce further monetary stimulus next month, the euro declined to a seven month low against the dollar in Asian trading on Monday. Friday’s comments from European Central Bank President Mario Draghi substantiated expectations that the ECB will announce further stimulus measures at its policy meeting on the 3rd December. The Euro edged down to $1.0605, breaking its recent low of $1.0615. The Euro also fell to 130.55 Yen, again its lowest since April.
The contrast between the ECB and the US Federal Reserve could not be greater as it appears destined to raise rates in December for the first time in a decade, offering support to the dollar. Against a basket of six major currencies, the dollar index added 0.4% to 00.949 whilst also rising to 123.15 Japanese Yen.
Commodity prices were kept under pressure with the strength of the dollar. Gold hit a six year low and was trading at $1 070.50 an ounce. With China’s weakening factory demand, traders bet that metal prices had further to fall resulting in Copper dropping to a six and a half year low. Oil prices sank again with US crude off 90 cents to $40.99 a barrel and Brent lost 60 cents to $44.06 as worries festered over a global supply surplus.
In the equity space, investors may later receive confirmation of the biggest ever deal in the healthcare industry. US based pharmaceutical firm Pfizer is widely expected to announce of $150 billion purchase with Allergan, the maker of Botox.
Traders will be eagerly waiting for French and German PMI data later this morning, which are widely expected to be in line with previous results. The figures are due at 8 and 8:30am respectively. US Fed officials have been called to meet later today to review the advance and discount interest rates charged to commercial banks.
US equity markets were buoyant on Friday, with the Dow Jones Industrial Average closing up 0.51% @ 17 823.81, the SP 500 adding 0.38% @ 2 089.17 and the Nasdaq closing 0.62% higher @ 5 104.92. The SP 500 clocked its best week in almost a year, while Europe’s main stock index enjoyed its strongest week in a month.
Amid high expectations that the European Central Bank will induce further monetary stimulus next month, the euro declined to a seven month low against the dollar in Asian trading on Monday. Friday’s comments from European Central Bank President Mario Draghi substantiated expectations that the ECB will announce further stimulus measures at its policy meeting on the 3rd December. The Euro edged down to $1.0605, breaking its recent low of $1.0615. The Euro also fell to 130.55 Yen, again its lowest since April.
The contrast between the ECB and the US Federal Reserve could not be greater as it appears destined to raise rates in December for the first time in a decade, offering support to the dollar. Against a basket of six major currencies, the dollar index added 0.4% to 00.949 whilst also rising to 123.15 Japanese Yen.
Commodity prices were kept under pressure with the strength of the dollar. Gold hit a six year low and was trading at $1 070.50 an ounce. With China’s weakening factory demand, traders bet that metal prices had further to fall resulting in Copper dropping to a six and a half year low. Oil prices sank again with US crude off 90 cents to $40.99 a barrel and Brent lost 60 cents to $44.06 as worries festered over a global supply surplus.
In the equity space, investors may later receive confirmation of the biggest ever deal in the healthcare industry. US based pharmaceutical firm Pfizer is widely expected to announce of $150 billion purchase with Allergan, the maker of Botox.
Traders will be eagerly waiting for French and German PMI data later this morning, which are widely expected to be in line with previous results. The figures are due at 8 and 8:30am respectively. US Fed officials have been called to meet later today to review the advance and discount interest rates charged to commercial banks.
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