Europe Market Report Europe open: Stocks rally after ECBs QE announcement European stocks advanced as the market continued to weigh the European Central Banks (ECB) decision to launch a quantitative easing (QE) programme. ECB president Mario Draghi on Thursday unveiled QE totalling €1.1trn, with the purchase of €60bn-worth of private and public securities each month until September 2016, slightly ahead of investors expectations. QE supports our above-consensus view on euro growth and benefits inflation expectations, hence it will limit second-round effects from the oil price decline, said Danske Bank. Italys government bonds jumped as investors sought euro-area debt after the ECB said it would buy the securities. It pushed the 10-year yield below 1.5% for the first time. The euro was down 0.83% at $1.1272 in morning trade. The market is now turning to the Greek elections on Sunday, with Syriza leading the polls. Ahead of the elections, German Chancellor Angela Merkel said she wanted Greece to remain part of the Eurozone but must take responsibility for its debt. On Fridays agenda, there is a batch of manufacturing data in the Eurozone, China and US. A preliminary reading of the HSBC Chinese purchasing managers index (PMI) for manufacturing activity rose to 49.8 in January from a final reading of 49.6 in December. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. In the euro-area, Markits PMI for manufacturing is expected to rise to 51.7 in January from 51.2 a month earlier. Analysts estimate that Markits PMI for US manufacturing may increase to 54 in January from 53.9 the previous month. The US also sees the release of a report on existing home sales which is projected to show a 3% gain in December after a 6.1% fall in November. In the UK, data is expected to reveal retail sales climbed 3.4% in December following a 6.9% increase a month before. Bank of England Governor Mark Carney will speak in Davos after the central bank this week revealed it voted unanimously to keep policy unchanged amid low inflation. His colleague, Andrew Gracie speaks in London in the morning. Oil recovers as Saudi king dies Brent crude increased 2.1% to $49.59 per barrel, according to the ICE. Saudi Arabias King Abdullah died overnight with Prince Salman, named as successor. Salman is expected to continue his predecessors policy of maintaining oil production to preserve the countrys 20% share of global crude sales. Among companies, a gauge of miners declined such as Antofagasta, Glencore, and Frenillo, as metal prices dropped.
Posted on: Fri, 23 Jan 2015 10:32:34 +0000
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