Asian stocks spooked as European Central Bank sounds growth alarm

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Asian stocks spooked as European Central Bank sounds growth alarm GlobeBusiness

Japan’s Nikkei dropped 1.6 per cent and Australia 0.8 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 1.1 per cent to a two-week trough.The Dow fell 0.78 per cent, while the S&P 500 lost 0.81 per cent and the Nasdaq 1.13 per cent. The closely watched Dow Jones Transport Average fell for a 10th straight session, the longest streak since February 2009.The next hurdle for investors will be U.S.

The numbers are still likely to highlight the relative outperformance of the U.S. economy, especially against the European Union, and further encourage dollar bulls.The euro cowered at $1.1189, having suffered its biggest one-day loss against the dollar since June 14, 2018 when the ECB last pushed back plans for a rate hike.

The euro also shed over 1 per cent on the yen overnight and was last trading at 124.70 yen. The Japanese currency was one of the few to hold its own on the dollar at 111.50. “The ECB’s updated forecasts imply that, at best, growth slowly returns to trend over the next few years, meaning it will be very difficult to get underlying inflation up,” wrote analysts at ANZ in a note.“Euro interest rates could be at current levels into 2021. That is not good news for euro area banks or the euro.”Oil prices eased as U.S. crude output and exports climbed to record highs, undermining efforts by producer club OPEC to tighten global markets.

 

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