Spreadex Market Update
Global indices loose lustre as pre-ECB jitters kick in once again
With its mining stocks obstinate in their redness, and the Dow Jones managing a rather meagre 0.2% rise after its data-less US open, the FTSE couldn’t help but fall back this Wednesday, slipping from a 0.7% peak into a rather more flaccid disposition as the afternoon wore on. This despite the fact that Brent Crude put in another post-$40.50 per barrel performance for much of the day, an increase that once would have lifted the entire commodity sector now greeted with little more than a shrug (perhaps thanks to the morning’s improved, but still mining-malady-filled, manufacturing figure).
The Eurozone, interestingly enough, managed to hold onto a decent chunk of its growth this Wednesday despite the (justified) nervy sentiment that began to encroach on the markets as the afternoon continued, the DAX and CAC each remaining up around 0.5%.
Following three days of foreplay it is finally time for the week’s main event tomorrow afternoon, with investors waiting with baited breath to see what Father Draghi has brought them for March-mas, be it a lump of coal or a big, gift-wrapped box of extra ECB QE. There are a variety of different expectations out there at the moment, from a €10-15 billion increase in monthly stimulus, to a temporal extension of the current programme, or a 10 basis points cut to the ECB’s deposit rate (or a combination of all three). Regardless of what Draghi reveals, however, there is a pretty big chance investors are going to be disappointed; yet given the arguable lack of effect the past and present programmes have had, it is difficult to tell what the markets would treat as a satisfactory announcement from the central bank.
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