EuroStoxx50: ECB Meeting Devoted to Monetary Policy
It seems that anticipation of the outcome of the meeting of Big 20, which started today and will continue at the weekend, affects not only the currency market buy a stock market as well. Since the beginning of the trading session today world stock indices have been in the narrow range and trading volume is low.
Although today, the People’s Bank of China lowered the rate of the national currency, at the closing session the pair USD/YUAN reached the level of 6.4816 against the closing level of Thursday at 6.4875.
Today’s positive Chinese data shows incentive policy conducted by Beijing has a positive effect on economic activity. Although GDP in China fell in Q1 (6.7% against 6.8% in the previous month), other economic indices for March including industrial production, investments on capital, retail sales and new loans were higher than expected. This fact increase positive sentiments about prospects of the second largest world economies.
Obviously positive Chinese news will be considered by the participants of the G20 meeting and may be reflected in the decisions of the meeting.
If the decision to recover world economy will be adopted at the meeting, it will provide support to the global financial markets and will have a positive impact on the stock indices.
It is worth noting that Fed St. Louis President James Bullard said yesterday that it would be reasonable continue interest rate increase in the USA. At the same time Mr. Bullard did not mention when it should happen.
On the other hand, negative European economic data show that measures introduced by the ECB are not sufficient.
It is likely that the ECB will leave monetary policy unchanged at the nearest meeting of which is scheduled by 21 April. However, some leaders of the ECB including chief economist Peter Prett believe that if economic situation deteriorates, the bank may lower the interest rate. It seems that the rate has not reached the “bottom” yet. Therefore, the rates are unlikely to be lowered before June.
European stock index EuroStoxx50 may grow up to the level of 3110.0.
The material has been provided by LiteForex - Finance Services Company - www.liteforex.com