European Central Bank Leaves Interest Rates Unchanged

European Central Bank Leaves Interest Rates Unchanged

European Central Bank Leaves Interest Rates Unchanged

The ECB is expected to wind down its 2.55 trillion euro (2.22 trillion pounds) bond-buying programme by the end of this year and raise its policy rate for the first time since 2011 towards the middle of next year. Draghi is due to speak at a press conference at 1:30 p.m. London time (8:30 a.m. ET).

World markets remained edgy on Thursday, with shares eking out gains amid concern over the global economic outlook and with US bond yields at four-year highs after breaking above the psychologically significant 3 percent line this week.

On Wednesday, the U.S. Dow Jones benchmark snapped a five-day losing streak thanks to more strong corporate earnings.

"This moderation may in part reflect a pull-back from the high pace of growth observed at the end of past year, while temporary factors may also be at work", he said.

"The worry is about an overheating, leading to a rise in inflation, higher interest rates which bring on a textbook recession". The Nasdaq was expected to benefit on Thursday after forecast-beating after-market results from data-scandal hit Facebook.

The reaction from its new chief executive, Christian Sewing, was to order cut backs in bond and equities trading in its long-troubled investment bank.

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Cost-per-click - the amount Google is paid every time an ad is clicked on - fell 19% compared to the first quarter of 2017. Alphabet's shares rose more than 4% in after-hours trading immediately following the earnings announcement, but retreated.

But what about the recent slowdown in the euro-zone economies?

"The Governing Council expects the key European Central Bank interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases", said a policy statement from the European Central Bank.

The ECB's decision to stand pat had been expected, but Mr. Draghi's caution suggests the ECB could yet delay a decision to phase out its EUR30 billion ($36.6 billion)-a-month bond-buying program, known as quantitative easing or QE, which is now due to run at least through September.

That could provide a lift to the euro which has sold off in recent days against the dollar to approach its March 1 level of $1.2154 - its weakest since mid-January. It fetched $1.2185 before the European Central Bank meeting as the dollar saw only its second drop in eight sessions.

Sweden's central bank meanwhile remained dovish at a policy meeting, pushing the crown to the lowest versus the euro since late-2009.

"With equity market sentiment holding firm in the face of rising bond yields, the almighty dollar could move through G-10 currency markets like a wrecking ball", Innes added.

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