Reassurances from Draghi lift US markets; Brent crude up 4%

By Gautam Broker, Research Analyst at CNBC-TV18

The US equity markets ended higher led by reassurances from Draghi.

European Central Bank left benchmark rate unchanged as expected; rate cut was not discussed at meet.

There was no cue on the timing of Spain aid request or bond buying; but ECB chairman Mario Draghi statements were comforting.

Draghi says

“I could say that today, we are ready with our outright monetary transactions or OMT”

‘Governments have made significant progress in addressing fiscal problems, structural reforms.’

‘OMT is an incentive to pursue right economic policies which benefit all parties.’

He did not comment on whether Spanish yields are at appropriate levels

Meanwhile, Spain sold euro 3.99 billion worth of bonds of 2, 3 and 5 years, just before the ECB meet.

Spain sold 3-year bond at an average 3.95 percent as against 3.84 percent last month.

New Spanish central bank head says government’s growth and revenues assumption was optimistic.

Bank of England purchase targets maintained and will decide on further stimulus next month.

IMF says no disbursal to Greece unless assured of debt sustainability and financing from creditors.

US weekly jobless claims stood at 3,67,000 as against consensus of 3,70,000.

US factory orders came in at -5.2 percent versus consensus of -6 percent.

Investors should watch out for non farm payrolls and unemployment rate today.

US markets at close: Dow Jones gained 0.6 percent at 13,575.4 and S&P 500 Index rose 0.7 percent to 1,461.4 while Nasdaq Composite was up 0.5 percent

European markets at close: CAC declined 0.1 percent and DAX was down 0.2 percent while FTSE rose 0.03 percent.

BoJ decision will be in focus today morning. Experts don't expect significant easing.
 
Today Asian markets were trading marginally higher; Shanghai remains shut. SGX Nifty was up 22 points at 5844.

Currencies

Euro hit a high of 1.303 to the US dollar yesterday after Draghi comments. It was at 1.3018 today morning.

Dollar Index was down to 79.2 from around 79.9-80 levels yesterday morning.

Yen was at 78.5 to the dollar ahead of Bank of Japan.

Commodities

Brent crude gained 4.1% at USD 112.58 a barrel yesterday while WTI crude closed at USD 91.7 a barrel.

Middle East tensions weighed on crude.

Turkey’s parliament authorised military action against Syria.

Gold hit a High of USD 1796 an ounce yesterday

LME Copper was up 0.5% in the last 24 hours

What to watch out for

BoJ rate decision, press conference

German factory orders

US Employment Report

US Consumer Credit