European Central Bank seen expanding stimulus amid Trump, Italy uncertainties

An all time-peak for Samsung Electronics helped lift South Korea 2 per cent. Tokyo's Nikkei put on 1.45 per cent as it brushed off a disappointing downward revision to Japan's third quarter growth.

After a quiet start, major USA stock indexes set more all-time highs Thursday afternoon as the market built on a surge the previous day.

The first of those is the possible removal of the lower yield limit for purchases - now set at the ECB's deposit rate of minus 0.40 percent - which has at various points over the a year ago raised concerns that the central bank may run out of German bonds to buy, where the most purchases are centred.

(Kitco News) - World stock markets were mostly higher in quieter overnight trading, following Wall Street's solid gains on Wednesday that produced record highs in the Dow Jones Industrial Average and the S&P 500 indexes.

The benchmark USA 10-year Treasury note's yield was up over 4 basis points at 2.393 percent, retreating from a session high of 2.427 percent. The head of the country's central bank made it clear in a speech that the bank was probably done with cutting interest rates.

According to Reuters, Amundi may pay 3.5 billion euros for Pioneer, enabling UniCredit to boost its capital base although it will probably still need to raise a further 13 billion euros from shareholders in an emergency rights issue later this month. Yields have been slowly moving lower after peaking at 2.449% on December 1st and with no major US economic reports on the calendar this week, rates could fall further into the weekend, leading to a deeper pullback in USD/JPY. Still, while Renzi's resignation could open the door to an early election next year and the possibility of the anti-euro 5-Star Movement gaining power, many investors and analysts think it more likely that a caretaker government will be put in place until an election in 2018. Brent crude, the worldwide standard, added 67 cents, or 1.3 per cent, to $53.67 a barrel in London. [O/R] Brent futures were quoted up 18 cent at $53.22, while US crude added 17 cents to stand at $49.95. Democratic nominee Hillary Clinton campaigned on reducing drug prices, and drug company stocks had rallied since the election as investors felt that was less likely to happen under Trump. "However, prices recovered somewhat after [ECB president Mario] Draghi indicated that tapering was not discussed by the governing council nor was tapering on the horizon", ANZ Research said. It rose 89 cents to $53.89 a barrel on Thursday.

But then, nearly as quickly, traders had a change of heart.

The dollar was otherwise slightly firmer as Asian currencies mostly sold off, with the yuan, Korean won and yen weakening modestly against the dollar. The euro rose to $1.0752 from $1.0715. It was scheduled to conclude at the end of March. Markets had expected only a six-month extension. It said that is not a sign it is getting ready to phase out the stimulus.

The pan-European STOXX 600 index rose 1.2 percent to its highest since January 6, also helped by gains in other cyclical sectors such as miners and autos. European stock indexes climbed. Germany's DAX jumped 1.7 per cent and French CAC 40 added 0.9 per cent.

  • Sylvester Abbott