Article / 04 September 2014 at 16:47 GMT

Market Close: ECB steps up to the plate with surprise rate cut

TradingFloor.com Team / Saxo Bank
Denmark
Forex: EUR trading weaker

Currencies Intraday







Source: Bloomberg

The EUR is trading in the red against its major counterparts after the European Central Bank unexpectedly slashed its benchmark interest rate by 10 basis points and introduced additional stimulus in an effort to boost the region’s weakening economy and to avoid the threat of deflation. In his post-meeting press conference, the ECB president Mario Draghi hinted that the central bank would announce additional stimulus measures, including the purchase of asset-backed securities, at its upcoming policy meeting. The USD is trading mostly higher. Data released today showed that the number of initial jobless claimants rose more-than-expected last week, while the ISM’s non-manufacturing activity index unexpectedly climbed in August. The GBP is trading mostly lower. In its policy meeting, the Bank of England maintained its key interest rate and the size of its bond-buying programme unchanged. The EUR is trading 1.4%, 1.1% and 1.0% lower against the USD, the JPY and the GBP, respectively.


UK Stocks: End stronger
FTSE 100 Intraday








Source: Bloomberg

UK stocks ended higher. In its policy meeting, the Bank of England held its key interest rate and the size of its bond-buying programme steady.

The FTSE 100 gained 0.1% to close at 6878 and the FTSE 250 advanced 3.9 points to settle at 15995.8.

Standard Life (SL/) surged 8.1% after the insurer announced plans to sell its Canadian business to Manulife Financial and announced that it would return some of the sale proceeds to investors through a special dividend. Peers, Old Mutual (OML) and Aviva (AV/) rose 1.2% and 0.9%, respectively.

easyJet (EZJ) added 1.4% after the airline reported a robust rise in the number of passengers it flew in August.

Financial sector stocks, Aberdeen Asset Management (ADN) and London Stock Exchange (LSE) rose 1.6% and 1.2%, respectively.

Centrica (CNA) fell 0.7% after it lowered its full-year earnings.

Hargreaves Lansdown (HL/) declined 2.2%, after a broker reaffirmed its sell rating on the stock.


US Stocks: Trading in the green
Dow Jones Intraday








Source: Bloomberg

US stocks are trading in positive territory.

The Dow Jones has risen 0.3% to trade at 17136.8 and the S&P 500 has climbed 0.5% to trade at 2010.5.

PVH Corporation (PVH) has surged 9.7% after the company reported a better-than-expected second-quarter profit.

Amazon.com (AMZN) has jumped 2.6% after a broker reaffirmed its outperform rating on the stock stating that the online retailer has showed an improvement in full-year gross profit margins at its first-party business.

Tyson Foods (TSN) has gained 0.3% after the food-production company reaffirmed its full-year earnings guidance.

Teradata (TDC) has declined 1.4% following a broker downgrade.

Energy stocks, Cimarex Energy (XEC) and Wisconsin Energy (WEC) have lost 0.3% and 0.2%, respectively.

Joy Global (JOY) has slipped 0.2% after reporting a fall in its third-quarter profit and lowering its full-year earnings outlook.


European Stocks: Finish firmer
EU Stoxx50 Intraday








Source: Bloomberg

European markets ended stronger after the ECB unexpectedly cut interest rates and revealed plans to purchase asset-backed securities.

The DAX rose 1% to end at 9724.3 and the CAC advanced 1.7% to close at 4494.9.

Banking stocks, Commerzbank AG (CBK), Piraeus Bank SA (TPEIR) and Alpha Bank AE (ALPHA) advanced between 3% and 5.6%.

Bayerische Motoren Werke AG (BMW) jumped 1.7% after reporting a sharp rise in US vehicle sales in August.

Senator Entertainment AG (SMN1) rose 2% after the company announced late yesterday that it secured support from its holding company, Sapinda Holding BV, to go ahead with restructuring and merger plans with Wild Bunch SA.

On the downside, Bilfinger SE (GBF) tumbled 9.5% after the company lowered its full-year profit forecasts.

Hermes International SA (RMS) and Nokian Renkaat Oyj (NRE1V) declined 1.8% and 1.7%, respectively, extending their previous session losses.


Asia: Indices close mostly in the red
Nikkei 225 Intraday








Source: Bloomberg

Asian markets ended mostly in negative territory.

In Japan, the Bank of Japan held its key interest rate unchanged and revealed plans to continue expanding its monetary base at an annual rate of JPY 60-70 trillion. NHK Spring (5991) declined 2.4% after it revealed plans to sell convertible bonds. Sony (6758) slid 0.8%. The company released several new smartphones and wearable devices yesterday. On the upside, Shinsei Bank (8303) gained 1.8% after a broker upgraded its rating on the stock to outperform from neutral. The Nikkei 225 index lost 0.3% to finish at 15676.2.

In China, China Vanke (000002) and Poly Real Estate (600048) gained 1.8% and 1%, respectively, following reports that the Chinese government would ease financing rules for listed developers. In Hong Kong, Hengan International (1044) dropped 1.6% following a broker downgrade. Yuexiu Property (123) lost 1.2% after it announced plans for a rights issue. However, Zhuzhou CSR Times Electric (3898) surged 7.7% following a report that the Chinese government would merge operations of its parent with another locomotive manufacturer. In South Korea, Samsung Electronics (005930) jumped 1.8% after the company unveiled two new Galaxy Note phones and a virtual-reality headset in New York yesterday.


Commodities: Trading lower

The Gold futures contract is trading 0.1% lower at USD 1269.5 per ounce oscillating between gains and losses.

The Brent crude one-month futures contract is trading 0.4% lower at USD 102.4 per barrel. According to the Energy Information Administration, crude oil inventories in the US declined in the last week.


Macro Update

US ADP non-farm payrolls climb in August

US initial jobless claims rise in the last week

US ISM non-manufacturing PMI advances surprisingly in August


Economic Calendar


Country

GMT

Economic Indicator

Relevance

Consensus

Previous/ **Previous Est.

Frequency

UK

-

Halifax House Prices (MoM) (Aug)

Low

0.10%

1.40%

Monthly

US

16:30

Fed's Mester Speaks on Monetary Policy in Pittsburgh

Low

-

-

-

US

23:00

Fed's Powell Speaks on Libor in New York

Low

-

-

-

Japan

23:50

Japan Foreign Reserves (Aug)

Low

-

USD 1276.00bn

Monthly

US

0:15

Fed's Fisher Speaks in Dallas

Medium

-

-

-

US

1:00

Fed's Kocherlakota Speaks in Helena, Montana

Low

-

-

-

Japan

5:00

Bank of Japan Monthly Economic Survey (Sep)

High

-

-

Monthly

Japan

5:00

Leading Economic Index Prelim (Jul)

Medium

107.10

105.90

Monthly

Japan

5:00

Coincident Index Prelim (Jul)

Low

110.10

109.70

Monthly

Germany

6:00

Industrial Production n.s.a. and w.d.a. (YoY) (Jul)

Medium

0.60%

-0.50%

Monthly

Germany

6:00

Industrial Production s.a. (MoM) (Jul)

Low

0.40%

0.30%

Monthly

France

6:45

Consumer Confidence (Aug)

Low

85.00

86.00

Monthly

Switzerland

7:00

Foreign Currency Reserves (Aug)

Low

CHF 455.80bn

CHF 453.39bn

Monthly

Switzerland

7:15

Industrial Production (YoY) (Q2)

Medium

-

0.50%

Quarterly

UK

8:30

Consumer Inflation Expectations

High

-

2.60%

-

Eurozone

9:00

Gross Domestic Product s.a. Second Estimate (YoY) (Q2)

Medium

0.70%

0.70%**

Quarterly

Eurozone

9:00

Gross Domestic Product s.a. Second Estimate (QoQ) (Q2)

Medium

0.00%

0.00%**

Quarterly

Eurozone

9:00

Government Expenditure (QoQ) (Q2)

Low

-

0.30%

Quarterly

Eurozone

9:00

Gross Fixed Capital (QoQ) (Q2)

Low

-0.60%

0.30%

Quarterly

Eurozone

9:00

Household Consumption (QoQ) (Q2)

Low

0.30%

0.10%

Quarterly

Eurozone

9:00

ECB's Nouy Speaks on Panel on Banking in Brussels

Low

-

-

-

US

12:30

Change in Non-farm Payrolls (Aug)

High

230.00K

209.00K

Monthly

US

12:30

Unemployment Rate (Aug)

High

6.10%

6.20%

Monthly

US

12:30

Underemployment Rate (Aug)

Medium

-

12.20%

Monthly

US

12:30

Change in Private Payrolls (Aug)

Medium

195.00K

198.00K

Monthly

US

12:30

Average Hourly Earnings All Employees (YoY) (Aug)

Medium

2.10%

2.00%

Monthly

US

12:30

Average Hourly Earnings All Employees (MoM) (Aug)

Medium

0.20%

0.00%

Monthly

US

12:30

Change in Manufacturing Payrolls (Aug)

Low

15.00K

28.00K

Monthly

US

12:30

Change in Household Employment (Aug)

Low

225.00K

131.00K

Monthly

Canada

12:30

Net Change in Employment (Aug)

High

9.50K

41.70K

Monthly

Canada

12:30

Unemployment Rate (Aug)

High

7.00%

7.00%

Monthly

Canada

12:30

Full Time Employment Change (Aug)

Medium

-

-18.10K

Monthly

Canada

12:30

Part Time Employment Change (Aug)

Medium

-

59.90K

Monthly

Canada

12:30

Participation Rate (Aug)

Low

66.10%

66.10%

Monthly

Canada

12:30

Labour Productivity (QoQ) (Q2)

Low

1.60%

-0.10%

Quarterly

Canada

14:00

Ivey PMI s.a (Aug)

Medium

55.20

54.10

Monthly

Canada

14:00

Ivey PMI n.s.a (Aug)

Medium

-

50.40

Monthly

US

14:15

Philadelphia Fed's Plosser speech

Low

-

-

-


For more events see TradingFloor.com's real-time financial calendar

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