ECB did as we expected and gave most markets a boost
The European Central Bank’s decision on Thursday to hold interest rates steady gave markets the fillip they had been lacking these past few days. In the immediate aftermath of the announcement, the DAX index spiked higher, S&P500 futures rose and the EURUSD hit new intraday highs, approaching 1.3180.
That unanimity of the rate decision plus ECB president Mario Draghi’s statement that the eurozone economy is improving, provided markets with extra support.
“Draghi was essentially confirming what we already knew from data. We are seeing stabilisation in the eurozone and exports are growing, indicating that competiveness in the region is increasing,” said Saxo Bank equity strategist Peter Garnry.
“If we can get through the first half of 2013 with no major bumps on the road we should see some kind of recovery to positive growth in the second half of this year, the Saxo Bank man added.
Meanwhile, Thursday’s first batch of figures out of the US - initial jobless claims and continuing jobless claims – released minutes before the ECB press conference, gave positive signals about the US economy.
However, the debt-ceiling debate will soon raise its head again and nervousness about the progress and outcome of discussions might mean that the stock market has already peaked.