The euro didn’t quite know what to make of the ECB’s newly announced stimulus package, a mixed bag parting gift from Italian stallion Mario Draghi.
The headline aspects of the package were a record low deposit rate of -0.5%, down from -0.4%, alongside the restarting of its quantitative easing programme less than a year after the scheme was paused, with €20 billion in bonds set to be purchased a month, starting in November.
Initially the euro was shaken by the confirmation of the central bank’s long-suspected plans. However, once it had time to properly dig through the details it was less concerned, swapping a 0.4% decline against both dollar and pound for gains of 0.4% and 0.2% respectively. That’s because the plans have been described as ‘less generous’ than first thought, with a certain amount of disappointment that the package wasn’t more robust.
Still, the Eurozone indices kept in the green after the reveal, if not with that much enthusiasm. The DAX crossed 12400 as it rose half a percent, with the CAC at 5740 after climbing the same amount.
The FTSE, meanwhile, couldn’t really do much with the day’s events, even as the pound dipped against the single currency. Instead the UK index sat effectively unchanged at its recent 5 and a half week highs.
Buoyed by the continued thawing of previously ice cold relations between the US and China – in theory evidenced by the tariff delays and exemptions announced by bother superpowers in the last 48 hours – the Dow Jones added another 100-odd points. That lifts to within touching distance of 27250, meaning the Dow has reclaimed almost all of the alarming losses it incurred at the start of August.
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