Unease over the global economy engulfed commodities and dented Asian equities on Wednesday, while the euro loitered near nine-year lows as investors bet the European Central Bank was just a week away from launching a new stimulus campaign.
Oil prices fell more than 1 percent on Wednesday after touching their lowest in nearly six years the previous session, extending losses alongside a sell-off in other commodities.
A landmark legal opinion this week will remind the European Central Bank of the limits it faces as it advances towards money printing, while a tumbling oil price saps inflation in debt-strained Europe.
Plunging oil prices have sparked a big rally in Asian government bond markets as lower fuel costs cut inflation expectations, but the rally could be built on shallow foundations as monetary policymakers remain out of step with tumbling bond yields.
The European Central Bank is considering a hybrid approach to government bond purchases which would combine the ECB buying debt with risk sharing across the euro zone and, in a nod to German qualms, separate purchases by national central banks.
Asian stocks gained on Friday on upbeat expectations for the closely-watched U.S. jobs data while the euro continued to probe fresh nine-year lows against the dollar.
U.S. stocks rallied for a second day on Thursday, boosted by expectations the U.S. economy will continue to improve and by hopes for more aggressive action from the European Central Bank.
Euro zone economic sentiment was unchanged in December against the previous two months, data showed on Thursday, as a more upbeat end-of-year mood in the services and retail sectors and among consumers was offset by a gloomier industry.
The euro took another downward lurch on Friday, sinking to a 4-1/2 year low against the dollar on clear indications that the European Central Bank will soon embark on outright money-printing.
Chinese stocks were celebrating their best year in five on Wednesday while markets elsewhere in Asia were ending 2014 on a cautionary note as worries about Greece's future in the euro zone served as an excuse to take profits on crowded trades.
The head of the panel of economic experts that advises the German government said on Sunday there was no reason for the European Central Bank (ECB) to start buying up sovereign bonds now to bolster euro zone growth.
The European Central Bank has told Austria's Volksbanken group to strengthen its balance sheet by next July as it rushes to wind down its flagship unit and plug a capital hole exposed by this year's health checks on euro zone banks.
World share markets extended their 'Santa rally' into a fourth day on Monday, as a recovery in beaten-down oil prices and the ruble and more calls for quantitative easing from the ECB helped lift sentiment.
The European Central Bank should start buying government bonds to tackle poor investor confidence and low inflation in the euro zone, governing council member Luc Coene said in an interview published on Saturday.
Asian share markets rallied on Thursday after U.S. stocks enjoyed their strongest session this year when the Federal Reserve sounded upbeat on the economy and promised to be patient in removing policy stimulus.
Subscribe to VCpost newsletter
- EU Military Spending Hits Record High of €240 Billion Following Russia's Invasion of Ukraine
- Nelson Peltz vs. Disney: Billionaire Activist Investor Seeks Multiple Board Seats as He Launches New Proxy Battle
- SoFI Is Exiting the Crypto World — Here Are the 3 Best Alternatives for Trading Crypto
- Denmark Set to Remove 1,000 Crown Banknote From Circulation
- Germany's Unemployment Rate Rises to Highest Since 2021
- Wall Street Experts Reveal Best Long-Term Investment Stocks to Buy
- New Disney Movie 'Wish' Fails to Shine at Thanksgiving Box Office
- JPMorgan Chase Is Ready to Leave China if Ordered by US Government, Bank CEO Jamie Dimon Says