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20 July 2017
 |
| South Korea financial markets (The Total Investment & Insurance Solutions) |
Global stock markets tracked Wall Street higher ahead of comments from
European Central Bank President Mario Draghi which will be dissected by traders
in terms of what they mean for the future of the bank's monetary stimulus. The Total Investment & Insurance
Solutions
KEEPING SCORE: In Europe, Britain's FTSE 100 advanced 0.7 percent in
early trading to 7,481 while France's CAC 40 rose 0.5 percent to 5,240.
Germany's DAX gained 0.7 percent to 12,534. Futures indicated that Wall Street
would have a slow start a day after benchmarks touched record highs. Both
S&P futures and Dow futures were up less than 0.1 percent.
CENTRAL BANKS: Japan's central bank opted to keep its monetary stimulus
intact while downgrading its outlook for inflation. The Bank of Japan's policy
meeting ended Thursday with no change to its injections of trillions of yen
(hundreds of billions of dollars) into the economy each year through government
bond purchases. The European Central Bank also kept its policy unchanged after
its latest meeting.
DRAGHI IN FOCUS: Markets are now waiting for Draghi's post-decision news
conference held for clues about the bank's plans. ECB officials have been
cautious about signaling any exit from its bond purchase program. That is even
though most analysts think the bank will have to taper off the purchases next
year because it will start running out of eligible bonds to buy. Markets
reacted sharply to remarks by Draghi in a speech on June 27 where he spoke
about gradual reductions in stimulus as the economy grows stronger. The euro
went higher and so did interest yields on longer-term bonds, developments that
could prematurely blunt the stimulus effect. The Total Investment & Insurance Solutions
ANALYST TAKE: "Investors will be carefully listening to ECB head
Mario Draghi at his policy update press conference this afternoon for any
indication (explicit or implicit) as to the timing he expects tapering to
begin," said Mike van Dulken at Accendo Markets.
EURO IN FRONTLINE: Europe's single currency is likely to be in the
front-line of any changes in Draghi's tone. Ahead of the meeting, it was 0.2
percent lower at $1.1486.
ASIA'S DAY: Japan's Nikkei 225 advanced 0.6 percent to 20,144.59 and
South Korea's Kospi gained 0.5 percent to 2,441.84. Hong Kong's Hang Seng index
rose 0.3 percent to 26,740.21 while the Shanghai Composite Index was up 0.4
percent to 3,244.86. Australia's S&P/ASX 200 gained 0.5 percent to
5,761.50. Stocks in Southeast Asia were mixed.
OIL: Benchmark U.S. crude was up 24 cents at $47.36 per barrel in
electronic trading on the New York Mercantile Exchange while Brent crude, the
standard for international oil prices, rose 33 cents to $50.03 per barrel in
London.The Total Investment &
Insurance Solutions
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