- Daily Zen
The euro has steadied a low that has been prevailing since almost two years now. Reports on Thursday stated a fall in the shares of Europe and raised concerns over the outlook of global growth. These rising concerns have sapped the appetite of the investors for the risk assets that has already been hit by clear lack of clues on the possible stimulus measures of the United States.
Reports released on Thursday showed a surprise cut in the rates in South Korea, an all-time record low cut of 50 basis points in Brazil and a surprise lack of any sort of clear policy actions from the Bank of Japan. These reports have added to the already cautious mood in the market that now favors more the dollar and the safe haven assets. According to Philippe Gijsels, the head of the research at BNP Paribas Fortis Global Markets, there is nothing much that can be expected from either the economic data or the earnings. The only thing that can be expected by the market is more of quantitative easing apart from a bit more of stimulus from the continent of Europe and everywhere else. The stocks of the European markets were most likely to decline as the financial spread betters called their main indexes in London, Paris. The Frankfurt and the FHCI opened with a down of as much as 0.7%. The stock futures of the US were down by only 0.3%.
The Market Scenario:
The measure of the greenback done against a basket of some of the key currencies rose to 83.61 that shows a two year high in overnight trade before it finally settled around 83.49 in the early activities in Europe. As a result, the rate of euro was pushed down to nearly about a low in two years of 1.2234 dollars. The dollar had actually gained its rate after minutes of the Federal Reserve meeting was published on Wednesday. It showed that the biggest economy of the world would need to be weakened further for its central bank to take any more steps of its easing. The minutes however also showed that some of the officials favored a bit more of stimulus.
Owing to a weak session in the share markets of Asia on Thursday, there was a low on the MSCI world equity index consecutively for seven straight sessions. The rate was down by 0.4 percent at 306.91 points. As per the Financial Times Stock Exchange (FTSE) Euro first 300 indexes, the rates of the top European shares lowered 0.8 percent and reached 1,031.11 in its early trade after having a flat close on Wednesday. In the debt markets, the investors took a close look of the sales in Italy that amounted to 7.5 billion Euros or (9.2 billion dollars) in the twelve month period of its bills. These sales precede a longer-term sale in the bonds by 5.25-billion Euros as reports showed on Friday. The yields from the Spanish and the Italian debts eased gradually with time.