Spreadex Market Update
Markets bask in pre-ECB QE glow
However, this appeared to be enough to help the markets recover the losses of the past 48 hours, with the DAX especially on course for brand new highs. The Eurozone markets as a whole were posting big gains as lunch-time approached, with the expectation that Draghi’s comments will only spur on further growth. The big loser of the morning, unsurprisingly, was the euro; the Eurozone currency hit 11 year lows after the bell, something that might be just the tip of the iceberg. The fully-fleshed out details of the quantitative easing plan are likely to push the euro even lower in a move similar to the yen’s reaction post-BoJ QE.
With this afternoon marking the entrance to the 7th year of the record-low interest rates implemented by the Bank of England, the FTSE had nearly returned to Monday’s intraday highs ahead of the ECB conference. The UK index has the previous form to suggest that any big Eurozone upswing after Draghi’s statement will drag the FTSE with it, so we could see a return of the 7000 point push that stalled at the start of the week.
The US futures continued to function on borrowed glory, posting growth in the face of ECB QE-defined morning in Europe. It will be interesting this afternoon to see which has the greater effect on the US markets; if the ECB statement goes as planned there should be some records broken this afternoon, including in the US; yet, the chance remains that today’s US data will once again disappoint, potentially leaving the Dow Jones et al. market outcasts by the end of the day. One gets the sense, however, that the ECB glow will outshine any negativity, at least until the close of the European markets.
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