Markets in Details: 10 September 2019

10 September, 2019

Stocks appear to be losing ground on Tuesday. All U.S. indices are in the red led by the Nasdaq, which opened 1% down, while European and Asian markets ended mixed due to the lack of a positive driver for stocks.

In Europe, investors expect the ECB to ease its policy when it announces the interest rate decision on Thursday. It will be a part of a range of stimulus to support the weakening European economy. Mario Draghi is also expected to restart bond purchases as a part of QE. But some oppose this option, namely, bank governors of France, Germany, the Netherlands, Estonia, Slovakia and Austria. Given the amount of pushback to the new QE program, the ECB could end up announcing a low-level, QE of 15-20bn a month to secure wide acceptance.

The UK announced positive data on wages and unemployment. It bit the expectations, although the pound remains volatile due to ongoing Brexit uncertainty.

UK PM Boris Johnson’s bid to call a snap election was defeated for a second time this week, and the UK parliament was suspended for five weeks until Oct. 14. Mr Johnson, who refused to seek an extension, has only two options at his disposal: get around the law banning a no-deal Brexit or work with the parliament to get a deal. The former version is more likely to take place, which will keep currency traders on edge between now and Oct. 31.

Meanwhile, oil prices are strengthening, despite the weak stocks, as the new Saudi Arabia Minister of Energy reiterated OPEC’s commitment to production cuts, thus fueling short-term optimism in the commodity market.


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