London — The tech-led reboot of stock markets stalled in Europe on Thursday as traders pulled back to hear just how twitchy the European Central Bank has become about the euro’s run-up in recent months.
Analysts were waiting to see whether reports that the ECB will fractionally revise up its coronavirus-battered economic and inflation forecasts later would ultimately affect the chances of a further ramping up of stimulus, which would rein in the euro. Markets in Sydney and Hong Kong were just better than flat though and, in a reminder of the risks, Jakarta nosedived 5% on plans to re-introduce Covid-19 social restrictions in the Indonesian capital.Mizuho Bank’s head of economics and strategy in Singapore, Vishnu Varathan, said investors were grappling with whether this month’s steep US tech sell-off was really done, and beyond that an increasingly uncertain US political outlook and persistent China-US tensions.
Earlier concerns that the bank may turn dovish, or sound worried about the euro’s rise, have given way to an expectation that it will be hard to justify more bond buying if it does edge up its economic forecasts.