A dove-ish European Central Bank chief gave little away earlier today. Mario Draghi claims there’s no end in sight to the monthly €60bn quantitative easing program and has kept the euro-region interest rate at 0%.
His low-key words were a part-attempt to keep a cap on the euro, but he failed abysmally. The euro climbed against most major currencies, well beyond $1.16 to a new two-year high. At 4pm the euro was at $1.1627, up almost 1%. Against the pound the euro was up 1.4% at 0.8961.
"The last thing the governing council wants is an unwanted tightening and for conditions that may either slow down this process or even jeopardise it," Draghi said. The news wasn’t all positive from euro-land with the European Commission's consumer morale gauge slipping to -1.7 in July compared to -1.3 in June.
- UK FTSE 100 7,487.87 +0.77%
- Dow 21,606.49 -0.15%
- S&P 500 2,472.56 -0.05%
- Nasdaq 6,383.60 -0.02%
- Nikkei 225 20,144.59 +0.62%
- DAX 12,420.54 -0.24%
- CAC 40 5,189.27 -0.51%
- Gold 1,251.40 +0.21%
- Oil WTI 47.26 +0.30%
"It seems clear that Draghi is walking a tightrope," said Jes Asmussen, chief economist at Handelsbanken Capital Markets, "with some need to communicate that monetary policy at some point will have to be tightened without roiling markets. We have already seen a strengthening of the euro, and it is clear that financial market developments will also have an influence on ECB thinking."
BA strikes to continue
There’s two more weeks of strike action from BA cabin crews though British Airways strike action disruption has been minimal so far, claims BA. The promise to extend the strike disruption means on-going uncertainty for BA to the middle of August. BA Unite union members are striking on pay and conditions: Unite claims many BA staff earn £16,000 a year.
“Since 2010 all British Airways new cabin crew employees join what is called ‘Mixed Fleet’, where despite promises that pay would be 10% above the market rate, basic pay starts at just £12,000,” says Unite. “Unite has seen no evidence from the company of crew achieving anywhere near the advertised potential rate of £21,000-£25,000 for the job.”
Murchoch on hold for Sky decision
Elsewhere Culture Secretary Karen Bradley says she could still refer Rupert Mudoch’s bid for Sky to the Competition and Markets Authority (CMA) and is still considering “all the representations”.
It’s expected that Bradley will supply a final verdict in the next few weeks however a CMA verdict can take at least half a year to reach a decision.
Meanwhile AlphaBay and Hansa 'dark web' interrnet sites have been closed thanks to a law enforcement probe. The US Department of Justice claims AlphaBay had heroin listed for sale.
The FTSE 100 ended almost 57 points higher at 7,487.87 tonight with strong rises for Ashtead Group and Provident Financial, both up more than 3%. However easyJet and BA-owner IAG saw shares tumble almost 6% and 4% respectively. For easyJet, the worry centred on lower revenue-per-seat, which may dip by as much as 2% in the next quarter. However easyJet's share price remains 32% up year-to-date at 1,336.72p.