Weathering an initially negative start – and perhaps still reeling from another ROUGH session over in the US – the European markets were tentatively receptive to the ECB’s Thursday announcement.
Following on from the Fed’s latest attempt at easing the markets – a Money Market Mutual Fund Liquidity Facility designed to assist money market funds in meeting redemption demands – Christine Lagarde revealed a €750 billion emergency stimulus plan for the Eurozone. The package will be spent buying up government debt across the region, with the potential for that number to climb based on Lagarde’s ‘there are no limits to our commitment to the euro’ comments.
The Eurozone indices reacted with varying levels of enthusiasm. The DAX could only muster a 1.4% rise, but with the Spanish IBEX jumping 2.5%, the French CAC climbing 3.2% and the Italian FTSE MIB surging just shy of 4%.
Left behind in all this was the FTSE, which itself could only add a paltry 0.5%. Then again, a stable open isn’t anything to be sniffed at amidst the present volatility – it is certainly better than the alternative.
Looking ahead to this afternoon and currently the Dow Jones seems like it is on the side of the FTSE, with the futures pencilling in a negligible 0.2% decline. What actually happens at the US open will likely dictate whether the Eurozone’s gains can be sustained until closing time.
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