Published: Sat, March 10, 2018
Markets | By Erika Turner

Euro jumps as European Central Bank hints at the end of quantitative easing

Euro jumps as European Central Bank hints at the end of quantitative easing

US President Donald Trump's plan to impose tariffs on steel and aluminium imports as well as threats of retaliation by the US's biggest trading partners have raised the spectre of a global trade war. Treasuries advanced, while the dollar rose. Investors are also assessing the potential risk that higher wages pose ahead of nonfarm payrolls.

Elsewhere, the U.S. healthcare sector was rattled as health insurer Cigna Corp said it would buy pharmacy benefits manager Express Scripts Holding Co for about $54bn.

The European Central Bank dropped a long-standing pledge to increase its bond buying if needed, taking another small step in weaning the euro zone economy off its protracted stimulus.

Elsewhere on Thursday, oil prices steadied after tumbling two percent Wednesday on a surge in U.S. crude output.

Last week the S&P 500 fell 1.3% on fears of a global trade war as Trump announced the U.S. was adopting tariffs of 25% on steel and 10% on aluminium. Some dealers have traded on the possibility that the tariff threat was a negotiating ploy in trade talks with US neighbors.

Here are some of the things people in markets are talking about today. "So people take some solace there and you see some move to the upside".

Markets have this week nervously watched a populist surge in the eurozone's third-largest economy and barbs exchanged between Washington and Brussels over looming United States tariffs on steel and aluminum and possible European Union counter-measures.

Investors took this as an indication that the European Central Bank is seriously considering wrapping up its stimulus programme, the first step in it normalising monetary policy and raising interest rates.

"We are convinced that disputes should be discussed and resolved in a multilateral framework", he said, warning that "unilateral decisions are dangerous".

"Under normal circumstances the ECB decision would not be a risk event as the central bank is expected to stand pat on policy". Our monetary policy measures, which have facilitated the deleveraging process, continue to underpin domestic demand.

Forecast: Quieter weather likely into the weekend
After an intense night of heavy snow and strong wind, the storm has moved out and things are slowly getting better. MONDAY: Mostly cloudy skies and snow flurries will be possible, with a high temperature of 46 degrees.

US monthly payrolls data come Friday.

The euro was little changed at $1.2409after retracing a bounce earlier on Wednesday to a 2-1/2-week peak of $1.2447.

March U.S. Dollar Index futures settled at 90.156, up 0.549 or +0.61%.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Euro was bearish at -84.8436, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 128.035.

The dollar was down by 0.1 percent to 1.2893 against its Canadian counterpart.

According to Eurostat's flash estimate, euro area annual HICP inflation decreased to 1.2 percent in February 2018, from 1.3 percent in January.

The British pound declined 0.6 percent to $1.3814, the first retreat in more than a week.

Bitcoin steadied after slumping more than 7 percent on Wednesday after USA and Japanese regulators tried to tighten their grip on crypto-currencies. Pound/dollar was on a downtrend amid Brexit uncertainties, reaching 1.3856 (-0.32%).

In commodities, oil prices inched back after falling more than 2 percent the previous day on record US crude production and rising inventories.

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