Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Euro drops after ECB trims stimulus; Treasury yields higher

Economic IndicatorsOct 26, 2017 03:24PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Traders work on the floor of the NYSE in New York

By Stephanie Kelly

NEW YORK (Reuters) - The euro fell against the U.S. dollar on Thursday after the European Central Bank began weaning the euro zone off loose monetary policy, while U.S. Treasury yields rebounded when the U.S. House passed a budget plan that paves a path for tax cuts.

The dollar index (DXY) rose 0.97 percent, with the euro down 1.32 percent to $1.1656, after the ECB said it would cut its bond purchases in half to 30 billion euros a month from January. However, it hedged its bets by extending asset purchases by nine months given continuously low inflation.

"With Draghi's openness to QE, it's a victory for the doves," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York.

Benchmark 10-year U.S. Treasury notes (US10YT=RR) last fell 3/32 in price to yield 2.4536 percent, from 2.444 percent late on Wednesday.

The 30-year bond (US30YT=RR) last fell 4/32 in price to yield 2.9608 percent, from 2.955 percent late on Wednesday.

The yields had slipped earlier in the day, in line with euro zone bonds, after the ECB's meeting. However, they recovered after the U.S. House passed a fiscal year 2018 budget, enabling tax legislation to win congressional approval without any Democratic votes.

The legislation is expected to be made public next week.

"If you do have something on the tax issue happen this year, that would be good for growth, it would be good for profits, it would be good for the equity side," said Sameer Samana, a global quantitative and technical strategist at Wells Fargo (NYSE:WFC) Investment Institute in St. Louis. "It would be one more reason to at least rethink fixed income holdings."

Gold dipped as the dollar gained against the euro after the ECB decision to trim bond purchases and as it hedged that move by also extending the lifespan of its bond-buying program.

Spot gold dropped 0.7 percent to $1,268.25 an ounce.

EQUITY STRENGTH

On Wall Street, all three major indexes gained, boosted by upbeat corporate results on one of the busiest days of third-quarter earnings. Seventy-four percent of 231 S&P companies have beat profit expectations as of Thursday.

The Dow Jones Industrial Average (DJI) rose 87.08 points, or 0.37 percent, to 23,416.54, the S&P 500 (SPX) gained 5.06 points, or 0.20 percent, to 2,562.21 and the Nasdaq Composite (IXIC) added 1.98 points, or 0.03 percent, to 6,565.87.

Ford Motor Co (N:F) reported a better-than-expected quarterly net profit, driven largely by U.S. sales of its high-margin pickup trucks, and said it would begin to test self-driving cars in some cities next year. The company's shares were up 1.45 percent.

Twitter's (N:TWTR) shares rose 19.0 percent. The social network company said it could turn its first ever profit in the fourth quarter, after making cost cuts and finding new revenue sources.

Nike (N:NKE) and holding company DowDuPont (N:DWDP) both lifted the Dow, with shares up 3.5 percent and 3.2 percent, respectively.

However, Celgene (NASDAQ:CELG) shares, which dropped 20.0 percent, dragged on the S&P 500 and the Nasdaq Composite after the biopharmaceutical company reported disappointing sales for its psoriasis treatment drug Otezla.

European equities were boosted by the weaker euro after the ECB's meeting. The pan-European FTSEurofirst 300 index closed (FTEU3) up 1.07 percent.

Japan's Nikkei (N225) rose 0.15 percent.

Oil prices were little changed after erasing earlier losses. Middle East tensions and Saudi comments about ending a global supply glut offset an unexpected increase in U.S. crude inventories and high U.S. production and exports.

U.S. crude rose 0.9 percent to $52.65 per barrel and Brent was last at $59.32, up 1.51 percent on the day.

Euro drops after ECB trims stimulus; Treasury yields higher
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email