Spreadex Market Update
Bank of Japan votes no to more stimulus, sends Nikkei and FTSE sharply lower
Following the Fed signalling that the door was still open for a rate hike in either June or July, with Esther George voting for a raise for the second month in the row, the Bank of Japan then provided an even bigger shock for the markets by deciding to delay any further stimulus to boost the country’s flagging economy. The new was treated with disdain by the Nikkei, which plunged over 3.5% as the Asian session came to a close, whilst the yen at points surged nearly 2% against the dollar.
That negativity has fed into the European open, with sharp losses seen across the board. The FTSE fell by around 0.7% as the day got underway, hampered not only by the central bank disappointment by the sector-leading 3% plunge seen by Lloyds, which revealed a 46% plunge in Q1 profits.
Over in the Eurozone things were nearly as bad, with the DAX and CAC falling 0.3% and 0.6% respectively. The region was dealt another inflation blow this morning as Spain’s latest CPI reading came in at a far worse than expected, and 14 month low, -1.1%. On top of that the its unemployment rate ticked up to 21%, painting a sorry picture of the country’s economy ahead of Spain’s second general election in a matter of months on June 26th.
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