RMBCompany believes Thursday July 5 was going to be a very busy day for financial markets, both because of the expected interest rate decision of the ECB and the Bank of England, and because a large number of important macroeconomic statistics.However, hardly anyone could have imagined that everything would be even more interesting.
Firstly, the Bank of England, as expected, increased its program of asset purchases by £ 50 billion. To £ 375 billion., Which became known at 15:00 (MSK).As we expected, contrary to classical logic, the pound strengthened immediately after the release of the data, as investors were inclined to consider such actions of central banks as support for the economy.But just a minute later, it became known that the PBOC has lowered the refinancing rate to 6.00% from 6.31% (deposit rate was reduced to 3.00% from 3.25%), which was the second decline in interest rates in Chinaper month.At 15:45 (MSK) the decision to reduce the basic interest rate to new historic low of 0.75%, the ECB has published (as expected).However, the actions of the Chinese regulator has changed the mood of investors: they began to consider the actions of central banks rather as evidence of the deteriorating economic situation rather than help in accelerating growth.The euro for 45 minutes after the announcement of the new level of the rate fell more than 100 points - up to 1.2400 the pair EUR / USD, after which he was more "finished off" Mr. Draghi (minimum quotation - 1.2364), said during apress conference that "downside risks to the economy materialize," and a rate cut will have a limited effect.Approximately at 18:00 (MSK) has contributed Danish central bank also lowered the rate, the refinancing rate was reduced to 0.00% and the deposit even went into negative territory (!) - Now it is 0.20% (that is, the banks will have to pay extra for the Danish central bank for the storage of their deposits).
market participants even after the "Chinese news" began to buy only at the moment a protective asset - the US dollar than it provoked a rapid consolidation and drop all risky assets.It was promoted and published data on employment - according to the ADP report changes in the number of employed in the private sector amounted to 176 thousand. In June against May 136 thousand. And the forecast of only 100 thousand., As the primary applications for unemployment benefits last week amounted to 374 thousand.against the previous figure 388 thous. and the forecast of 385 thousand. As a result, the dollar index on the ICE rose to a weekly high, approaching the 83.00 level.Because, despite the easing by central banks, won a negative mood, the major stock indexes also finished the trading session Thursday in the red zone.
RMBCompany Research Department notes that Asian stock markets are falling, reacting to negative yesterday, caused by the actions and comments referred to the central banks, futures on US and European indices are also in the red zone.All attention today will be focused on data on unemployment in the US, which should shed light on whether the situation in the world's largest economy is not as tragic as it seemed so long ago.And, of course, the data will provide a basis for predicting the future actions of the Federal Reserve System.
