European Central Bank boss Mario Draghi delivered a bland and most featureless offering to investors with monetary policy unchanged earlier today. But he did suggest more clarity on quantitative easing – the monthly €60bn load to stimulate eurozone growth – would likely be pencilled in for the ECB October meeting.
“We will announce,” he said, “when we are ready. We think we are going to be ready for much of what we have to decide in October ... if we are not then we postpone.” But no rush Mario.
Eurozone inflation was revised down from +1.6% to +1.5% for 2017 but growth has been re-set at +2.2% – the fastest rate since 2007. Draghi's words were also about what he didn't specifically mention in-depth – the euro's strength.
All in, expect the rise of the EU common currency to continue as a tapering picture begins to emerge and the US economy continues to push out conflicting messages (somewhat like the UK’s economic Brexit situation also). The euro surged almost +0.75% by 4pm to $1.2003 while the pound hit $1.3108, up +0.52%.
- UK FTSE 100 7,396.98 +0.58%
- Dow 21,790.47 -0.08%
- S&P 500 2,463.51 -0.09%
- Nasdaq 6,395.71 +0.04%
- Nikkei 225 19,357.97 -0.14%
- DAX 12,297.08 +0.68%
- CAC 40 5,116.69 +0.30%
- Gold 1,350.60 +0.87%
- Oil WTI 48.91 -0.51%
US economy to count double cost of hurricanes
US stocks were broadly flat today as Hurricane Irma heads towards the US mainland after wreaking havoc and causing multiple deaths in the Caribbean. The US southern economy is still counting the cost of Hurricane Harvey, and its possible consequences for US third quarter GDP. Just how much damage Irma may cause is difficult to judge.
Harvey is now thought to be the costliest hurricane to impact the US (Texas governor Greg Abbott has put the cost at close to $180bn), hitting 10% of US oil refining output. Global fuel prices continue to be impacted. The two catastrophes could help pin down the potential for a US rate rise later in the year.
Argos hires 10,000 workers; BMW joins electric race
Meanwhile back in the UK Sainsbury’s owned Argos is to hire 10,000 temporary workers to cope with the Christmas sales surge. All workers will be offered 10+ hours a week.
Earlier today Tata-owned Jaguar Land Rover claimed it would have a fully-fledged electric or hybrid model line by 2020, the first being the Jag I-Pace to be launched in 2018. BMW has now also elbowed in. It claims it will have 12 fully electric models on sale by 2025. The fruits of BMW’s electric strategy will be seen in 2019 with an electric Mini.
Breaking news: UK GDP growth was lacklustre in the second quarter at +2.4% – joint slowest with Portugal. The UK FTSE 100 closed 42 points higher at 7,396 with Micro Focus Int and AstraZeneca taking +5% and +4.3% share price rises. Admiral Group shares fell -2%.