While you were sleeping: More signs of EU weakness

Mario Draghi says domestic demand in Europe has dampened

Equities in Europe fell as European Central Bank president Mario Draghi warned of "further weakness" in the region's economy.

Data released last week showed that the EU economy contracted more than expected in the fourth quarter, shrinking 0.6 percent from the previous three months.

"Available indicators signal further weakness at the beginning of 2013, with domestic demand remaining dampened," Mr Draghi told EU lawmakers in Brussels today.

Europe's Stoxx 600 Index declined 0.2 percent. The UK's FTSE 100 also fell, closing down 0.2 percent. France's CAC 40 gained 0.2 percent, while Germany's DAX strengthened 0.5 percent.

Wall Street was closed for the President's Day holiday on Monday.

Mr Draghi also sought to play down any talk of currency wars as central banks provide cheap money to help revive their economies. The euro fell 0.2 percent against the US dollar.

"Most of the exchange rate movements that we have seen were not explicitly targeted, they were the result of domestic macro-economic policies meant to boost the economy," he says. "In this sense, I find really excessive any language referring to currency wars."

The Japanese yen slid fell 0.5 percent against the US dollar, and weakened 0.4 percent against the euro, after Group of 20 finance ministers and central bank governors refrained from asking countries to avoid targeting exchange rates.

"There's renewed selling pressure on the yen and it's a reaction to the G-20 statement," Adam Myers, head of foreign-exchange strategy at Credit Agricole Corporate & Investment Bank in London, told Bloomberg. "Everyone has woken up to the realisation that the G-20 couldn't criticise Japan when many other countries are manipulating their own currency."

One development that could help the yen is the naming of a new governor for the Bank of Japan. Reuters says that Prime Minister Shinzo Abe may nominate former financial bureaucrat Toshiro Muto as early as this week. Masaaki Shirakawa will give up the post on March 19.

Commodities including nickel, copper and aluminum weakened amid concern about the pace of growth in China after a report showing disappointing retail sales.

Nickel for delivery in three months was last down 2.7 percent to $US17,890 a metric ton on the London Metal Exchange after earlier sliding as much as 3.1 percent, the most since October 12, and dropping below the 34-day moving average at about $US17,837, according to Bloomberg.

(BusinessDesk)


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7282 -0.0001 -0.01%
AUD 0.9496 0.0030 0.32%
EUR 0.6481 -0.0008 -0.12%
GBP 0.5610 0.0025 0.45%
HKD 5.6459 0.0007 0.01%
JPY 73.9540 0.4370 0.59%

Commods

Commodity Price Change Time
Gold Index 1319.6 -1.410 2016-09-29T00:
Oil Brent 49.8 0.570 2016-09-29T00:
Oil Nymex 47.8 0.780 2016-09-29T00:
Silver Index 19.2 0.070 2016-09-29T00:

Indices

Symbol Open High Last %
NZX 50 7343.4 7361.1 7343.4 0.24%
NASDAQ 5311.3 5317.0 5318.5 -0.93%
DAX 10545.6 10575.3 10438.3 -0.31%
DJI 18322.9 18366.2 18339.2 -1.07%
FTSE 6849.4 6941.1 6849.4 1.02%
HKSE 23435.3 23484.4 23739.5 -1.27%
NI225 16474.5 16497.5 16693.7 -1.33%
ASX 5471.3 5471.3 5471.3 -0.49%