NEW YORK (Reuters) – European shares rose more than 1 percent on Thursday, while the euro rallied against the dollar after the European Central Bank said it would not raise interest rates until summer. 2019.
The unexpected and pessimistic orientation of the bank on interest rates overshadowed its statement that it aimed to close its stimulus program of the crisis era, quantitative easing, later this year.
The ECB now plans to reduce monthly purchases of assets between October and December to 15,000 million euros until the end of 2018 and then conclude the program, although ECB President Mario Draghi stressed that the governing council was ready "for adjust all their instruments as appropriate. "
Investors, however, took advantage of comments that indicated that interest rates would remain at historic lows at least during the summer of 2019.
Some analysts believe that it could be even more.
"With the expiration of Draghi's mandate at the end of October 2019, we believe that the ECB is unlikely to start raising interest rates until the new ECB president is firmly established," said David Zahn, head of the ECB. European fixed income. for Franklin Templeton.
Yields on 10-year government bonds in Germany, the benchmark for the euro area, fell around four basis points to 0.43 percent DE10YT = RR.
The euro, for its part, touched its steepest one-day decline against the US dollar since June 2016, while the dollar accelerated to a two-week high.
The euro EUR = fell for the last time by 1.37 percent to $ 1.1628, while the dollar index, which measures the dollar against six major currencies, rose 0.85 percent .DXY.
European stocks rose sharply after the initial losses, with Wall Street entering positive territory.
The pan-European FTSEurofirst 300 index .FTEU3 rose 1.40 percent, driven by large gains in interest-sensitive sectors such as cars and utilities.
"The hawks had been leading a hike in June before the meeting [ECB] and, given the ECB's clear guidance on interest rates today, it had to be disqualified," said Arne Group analyst Arne Petimes. "It does not look like we're in the stage where hawks are at the top."
The MSCI indicator of worldwide shares .MIWD00000PUS lost 0.05 percent, while Wall Street faltered, with two of the top three rising the index after May retail sales data better than expected.
The US Department of Commerce UU He reported that retail sales rose 0.8 percent last month, the biggest advance since November 2017. April data was also revised up.
The Dow Jones Industrial Average .DJI fell 7.94 points, or 0.03 percent, to 25,193.26, the S & P 500 .SPX gained 7.6 points, or 0.27 percent, to 2,783.23 and the Nasdaq Compound .IXIC added 62.69 points, or 0.81 percent, to 7,758.39.
MSCI's broader index of Asia and the Pacific shares outside Japan .MIAPJ0000PUS closed with 1.11 percent less, while the Nikkei .N225 of Japan lost 0.99 percent.
The 10-year US Treasury bond UU US10YT = RR last climbed 8/32 in price to yield 2.9516 percent from 2,979 percent on Wednesday.
The 30-year bond US30YT = RR rose 21/32 in price to yield 3.0696 percent, from 3,102 percent on Wednesday.
One problem keeping investors under control was concern over US threats to impose tariffs on $ 50 billion of Chinese products. US President Donald Trump planned to meet later with business advisors to decide whether to activate the rates, a senior administration official said on Wednesday.
CBOT corn and soybean futures plummeted because uncertainty about tariffs and favorable weather for crops in the Midwest of the US. UU They have promoted funds to liquidate large long positions.
CBOT July 1CN8 corn fell to its lowest level since mid-January and the Sc1 soybean in the month of anticipation fell to a minimum of 9-1 / 2 months. Traders are concerned about China, Mexico and other countries that reduce the demand for grains and soy exports from the United States.
Another event in which the markets were preparing: the start of the Football World Cup in Russia, where the time zone differences mean that there will be more matches during the hours of European or US negotiation. UU And Latin America than in any previous tournament.
A study conducted during the last World Cup with similar timed games, the 2010 finals in South Africa, showed that trading volumes in stock markets fell by a third on average when the matches were and at 55% when they played the market's own team.
Oil prices fell, facing the pressure of evidence of increased US production. UU And the uncertainty about the supply, before a meeting next week of the world's largest exporters.
U.S. CLcv1 crude fell 0.3 percent to 66.44 dollars per barrel and Brent LCOcv1 was quoted at $ 75.95, down 1.03 percent on the day.
Additional reports by Marc Jones, Danilo Masoni, Dhara Ranasinghe and Tommy Wilkes; Nick Zieminski's edition