Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: EUR President Draghi Speaks @ 08.00 GMT
WHAT WE’RE WATCHING TODAY
Euro Hovers Near Lows As Draghi Speech Awaited
The euro touched a new three-month low against the dollar today as investors awaited comments from ECB head Mario Draghi and took on board the results of the weekend elections. Critics of the European Union more than doubled their presence following the elections, as voters registered discontent over immigration, austerity and unemployment. Although it is unlikely that Draghi will say anything new or surprising, his speech will be closely watched for any signals about the ECB’s next steps. The euro has fallen more than 2 percent on the greenback since May 5 against a backdrop of rising expectations that the ECB will ease policy next month, which in turn increased wagers on the common currency coming under pressure. The Euro last traded at $1.3619, down about 0.1 percent on the day. Early in the session, it briefly dipped to $1.3615, a low not seen since mid-February. Against its Japanese counterpart, the euro slipped about 0.2 percent to 138.80 yen. Traders said the policy outlook will continue to be a negative factor for the euro rather than results of the weekend elections.
Gold Steady Below $1,300 As Ukraine Elections Eyed
Gold continued to hover below $1,300 an ounce on today after ending flat for two straight weeks but the metal could gain from developments in the Ukraine where pro-West billionaire Petro Poroshenko claimed the Ukrainian presidency on Sunday. Analysts say the relationship between Russia and the newly elected president in the Ukraine will be key for gold prices. Since the new president is not pro-Russia, it could make Ukraine more divided. There is still a lot of uncertainty and political risk there, which could boost gold’s safe-haven appeal. Spot gold was steady at $1,293.01 an ounce after ending flat for a second straight week. The metal has closed between $1,291 and $1,296 in the last seven sessions. Liquidity is likely to be thin today with U.S. markets closed for Memorial Day and Britain shut for a bank holiday.
Lagarde: Central Banks Should Cooperate On Policy Moves
IMF Managing Director, Christine Lagarde is urging central banks to cooperate on policy moves as the Federal Reserve debates the timing of its first interest rate hike since 2006. Lagarde stressed that in times of distress, the potential gains from cooperation can be huge by reducing the risk of tail events with large international feedback effects. The Fed and the Bank of England are expected to start raising interest rates in 2015. The Fed’s decision to unwind quantitative easing last year threw emerging markets into turmoil, prompting sharp currency and equity market declines in India, Indonesia, Brazil, South Africa and Turkey, and underscoring the impact of Fed policy on global markets. The case for policy cooperation may seem less compelling as urgency fades with the global economy turning a corner and as the gains from cooperative policy responses are unclear but it is precisely this uncertainty that would make us remiss in discounting the gains from cooperation in a post-crisis. Reducing vulnerabilities and reinforcing macroeconomic and financial frameworks should be the order of the day for emerging markets-and indeed for all countries according to Lagarde.
That sums up today’s highlights! We hope you have a profitable day on the markets.
