While the European Central Bank's second liquidity injection operation was met with cheer, global markets reacted to Federal Reserve Chairman Ben Bernanke's silence on not signalling any further monetary easing to stimulate growth in the US.
European banks took larger than expected amounts of cheap three year loans from the ECB. In all, 800 banks took around 530 billion euro in funds pushing the total of LTRO money borrowed over the trillion euro mark. The first LTRO saw 489 billion euro being funded.
Europe Closing: FTSE down 1%; DAX down 0.5%; CAC flat
Bernanke dashed hopes of any further monetary stimulus during his speech to Congress on the economy. However, the S&P surged 8.7% since January, logging its best start to the year since 1991. The Nasdaq briefly topped 3,000 in intraday trading for the first time since December 2000.
US GDP grew at a 3% annual rate, logging the fastest gain since the second quarter of 2010. Weekly mortgage applications rose last week as interest rates dipped.
US Closing: Dow down 0.4% at 12,952; S&P down 0.5% at 1,365.7; Nasdaq down 0.7% at 2,966.89.
Data to Watch
- US Jobless Claims
- US Personal Income & Spending
- US Construction Spending
- US Monthly auto Sales
- Bernanke testimony: Senate
The MSCI Asia Pacific ex-Japan fell 0.3% after rising 1.4% to a seven-month high on Wednesday, taking its cues from US stocks which were weighed down by Bernanke's comments.
Japan's Nikkei opened up 0.5% and extended its gains in early trade. Korean markets are shut today on account of a public holiday.
Asia Today: China Feb PMI 51 Vs 50.5 (MoM); Shanghai, Hang Seng down 0.2%; Nikkei up 0.5%; Straits up 0.3%; Taiwan up 0.2%
Commodity & Currency Corner
In the currency space, there was major profit booking on the euro-dollar post LTRO2. The euro continued to trade lower, at 1.33 to the dollar versus yesterdays high of 1.3485. The dollar Index is at 78.8 versus 78.2 yesterday.
Crude price trended higher as speculation that the US