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Markets hit 2016 highs as Draghi urges leaders to act - business live

Discussion in 'Market News' started by Lily, Mar 18, 2016.

  1. Lily

    Lily Forum Member

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    Shares in Asia have hit their highest levels of the year as the US dollar weakens


    8.40am GMT

    European markets are pretty stable this morning, after seeing Wall Street hit 2016 highs last night.

    Mining companies are continuing to push higher, due to the weaker US dollar pushing up commodity prices.

    The best and worst performers in Europe this morning ..
    very much Miners vs Banks so far! #markets pic.twitter.com/AXeXoTTVCy

    8.37am GMT

    Money is still pouring into Japanese government debt today, following the recent imposition of negative interest rates.

    It’s sending the rate of return on 10-year bonds to a new record low, further below zero.

    Japan 10-year yield drops to record, below negative deposit rate pic.twitter.com/fNmKBuf5Bg

    8.34am GMT

    Speculation is swirling that central bankers have made a secret deal to prevent the US dollar strengthening any further.

    The theory is that global policymakers cooked up a plan when they met in Shanghai in last month, amid worries that the surge of money into the greenback was destabilising markets and fuelling deflation (by driving commodity prices downwards).

    To any conspiracy theorists it’s all become quite clear. There is a global coordinated central bank effort to weaken the US dollar in play.

    Whether it’s the People’s Bank of China easing the Reserve Ratio Requirements (RRR) by 50 basis points, the RBNZ cutting its cash rate by 25 basis points (very much out of consensus), or the ECB moving to a focus on credit markets and going significantly above and beyond expectations. Of course, then we also have the Fed, who missed the economists’ modestly hawkish playbook by about as wide a margin as we will likely see.

    “There seems to be some kind of tacit Shanghai Accord in place.”

    “The agreement is to roughly stabilize the dollar versus the major currencies through appropriate monetary policy action, not through intervention.”

    8.00am GMT

    The promise of stimulus measures and easy monetary policy is sending world stock markets rallying.

    Last night, the Dow Jones industrial average turned positive for the year, putting the turmoil of January and February behind it.

    Global currencies soar, defying central bankers https://t.co/gyFVuWcoS6 pic.twitter.com/1QLwk88Mry

    MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8%, entering positive territory for the year for the first time. It is up 2.3% this week,and has surged 10.4% this month. The Hang Seng index was up 0.6 percent, heading for a weekly rise of 3.6%.

    China’s Shanghai Composite index and CSI 300 climbed about 1.9%,and were set for gains of about 6.4% for the week.

    7.50am GMT

    Good morning and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    “I made clear that even though monetary policy has been really the only policy driving the recovery in the last few years, it cannot address some basic structural weaknesses of the eurozone economy.

    “For that you need structural reforms, mostly driven to raise the level of demand, public investments and lower taxes. Even more importantly, one needs clarity on the future of our ... monetary union.”

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