Summary:
- ECB extend their QE programme to Sep 18 at reduced rate of 30B/month
- All others rates kept unchanged. Euro drops lower whilst stocks rally
- IBEX soars as Catalan tensions ease
- US stocks mixed with earnings releases attracting attention
- USD threatens to breakout as Yellen reportedly ruled out of re-election
- Bitcoin rises back near $6000
Despite being widely expected an announced extension to the ECB asset purchase programme has seen some substantial moves in the markets. The QE will now run until September of next year, and further if required and the news has seen the EURUSD fall back to test a key support level whilst the DE30 has surged up to an all-time high.
All other rates were kept on hold by the ECB but the news has provided a further boost to European indices. The SPA35 was already markedly higher on the day ahead of the announcement with an apparent easing of tensions between the Catalan and Spanish government seeing a surge higher in stocks. The situation hasn’t been full resolved however and early reports that regional elections would be called have been subsequently dismissed by Catalan president Puigdemont.
US stock indices are trading in a mixed fashion today with the US30 rising back near its all-time high but the US100 is a laggard. Two shares that have reported today are Ford and Twitter with both shares rising since their respective releases ahead of the opening bell. After the bell Tech heavyweights Alphabet (Google’s parent company) and Amazon are both set to report and given their market cap significant moves in their shares could have an impact on the US100.
Unconfirmed reports that the incumbent Fed chair Janet Yellen has been ruled out of the running for remaining in the position beyond her current term could have an impact on the US dollar. Politico, an American news organisation, have reported that Yellen will not be re-appointed seemingly leaving a two horse race between Powell and Taylor. The news has added further juice to the move higher in the USD seen lately and the trade weighted index (USDIDX) has risen to test potentially key resistance around 94.
There is no doubt that the recent excellent performance of Bitcoin could have stemmed chiefly from rising demand in anticipation of a fork. In this scenario traders would be credited with free money in form of Bitcoin Gold, however everybody scratches their head what price of the new cryptocurrency could be. Prices have been quoted from $0-2900 for the new market and it is still far from clear what an accurate gauge is.