ECB boost – Euro dips whilst Asia equities spill

Asian stocks surged on Friday as the European Central Bank commenced a milestone bond-buying incentive program that sustained the shareholder’s risk eagerness that drove the bonds higher and eventually dropped the euro to the lowest mark in past 11 years. The ECB took a crucial jump in the quantitative moderation on Thursday by launching a government bond-buying program, which is expected to drive thousands of millions of fresh funds into a slumping euro zone market.

The euro dropped nearly 0.2% to $1.1344, which is quite close to its 11 year low mark of $1.1316 overnight and has shed approximately 2% in the current week. Moreover, the general currency also dipped to 134.28 yen, which is the lowest in the past three months. Spreadbetters expect the European market to recover to its previous mark, as it forecasts Britain’s FTSE to open with a 0.3%, Germany’s DAX with 0.5% and France’s CAC up with 0.7% elevated mark.

Worldwide Impact

Boosted up by the global rush in equities, MSCI’s broadest indicator of Asia Pacific shares outside Japan confirmed some positive signs. It increased by 0.9%, which is recorded as the highest boost in the last eight weeks.

On Wall Street, the S&P 500 and the Dow each gained approximately 1.5% overnight. Crude oil prices rebounded as Saudi Arabia declared Salman as the new King of the world’s largest oil exporter, after the death of King Abdullah. Consequently US crude oil rose 85 cents to $47.16 per barrel.

Japan’s stock market, Nikkei experienced a gain of 1% along with the share markets of Australia and South Korea, which also recorded ample gains. Furthermore, the Indonesian stock market augmented to a record high.

The impact was limited to the HSBC flash PMI, which demonstrated a standstill in China’s manufacturing growth for the consecutive months in January.

On the other hand, the Australian dollar fell to a 5.5 year low of $0.7980.