The central bank is widely expected to announce another 500 billion euros in QE purchases
Meanwhile, US stock markets closed lower overnight as losses in technology companies outweighed gains in industrial, energy, and materials stocks. The S&P 500 index fell 0.8%. The benchmark index climbed to record highs four times in the past two weeks. The Dow Jones Industrial Average lost 0.35% and the tech-heavy Nasdaq Composite fell 1.94%. After days of trying to reach a relief deal, US lawmakers had not resolved a range of issues preventing an agreement.
Today in Asia, equities eased from record highs as stalled U.S. stimulus talks and a sell-off in tech stocks weighed, while British and EU leaders meanwhile gave themselves until the end of the weekend to seal a new trade pact. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.34%. Australia’s S&P/ASX 200 declined 0.67% after China announced additional import taxes on wine from Australia. Still, on the positive side, a vaccine from Pfizer and BioNTech is on track for a positive review and potential approval in the U.S. within the next week.
Following suit, European stocks opened lower on Thursday as investors took a breather after the recent buying wave. On the Brexit front, UK foreign secretary, Dominic Raab, said that Brexit talks could continue after Sunday but added that they can’t rule out that it won’t be extended. Meanwhile, in a sign of rising tensions between the world’s two largest economies, the Chinese foreign ministry vowed to sanction US lawmakers and revoke visa exemption treatment for US diplomats. Now, investors are looking ahead to a European Central Bank monetary policy meeting due later today.
Meanwhile, the dollar looks mixed against the majors, with EURUSD having settled just below the 1.2100 handle ahead of the ECB decision. The central bank is widely expected to announce another 500 billion euros in QE purchases. However, if the monetary authorities want to weaken the euro, they need to deliver a larger package of around 750 billion euros. If the central bank manages to send the common currency lower, EURUSD could target the 1.2000 figure.
