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Daily Review 09.09.2016

Global stocks react negatively on disappointing European Central Bank decision

Major equity markets around the world were thrown in the green zone on Thursday after the European Central Bank (ECB) disappointed investors on its decision to put interest rates on hold and remained mum regarding the extension of its asset purchase program.

The ECB confirmed that it would continue its $90 billion bond buying program each month until March next year and retained its benchmark refinancing rate at 0%.

The announcement fell short of investors’ expectations and dragged down stocks indices as the pan-European STOXX 600 finished down 0.3% while the German DAX settled 0.7% lower.

U.K’s FTSE 100 closed 0.2% higher as news that Micro Focus, which closed nearly 15% on Thursday session, will merge with Hewlett Packard Enterprise boosted the index.

In Wall Street, the Dow Jones industrial average dipped 46.23 points, or 0.25%, to close at 18,479.91.  The S&P 500 dropped 4.86 points, or 022%,  settling at 2 181.3 while NASDAQ composite snapped its four-day winning streak by slipping 24.44 points, or 0.46% at 5 259.48.

Dollar recovers from previous losses, pulls precious metals down

US dollar regained its strength against yen on Thursday as it closed up 0.1%, erasing previous losses and pushing precious metals in red territory.

Against the Japanese yen, the dollar climbed 0.76% and was last trading at 102.48, with the currency pair considered as the most vulnerable to rising inflation expectations and interest rate changes.

But the euro took advantage on ECB’s decision to retain its interest rate as it rose to a session high of 1.1326 against the greenback.

With the regained strength of the dollar, precious metals dropped modestly in yesterday’s trading.

US gold lost $7.60 and was last trading at $1341.60 per ounce while the spot gold tumbled 0.59% and closed at $1336.96 per ounce.

Spot silver was down 0.78% at $19.61 while Platinum closed at $1080.20 an ounce after it shed 0.44%, from its two-week peak on Wednesday.

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