After completing the seventh year of its bull run yesterday, Wall Street is pointing to more gains after the European Central Bank decision to expand quantitative easing operation to €80 billion a month from €60 billion. The high expectations for more stimulus from the ECB have been met.
Markets Climb After ECB Decision
Markets climbed after ECB chief, Mario Draghi delivered on expectations of even deeper negative interest rates on deposits held at the ECB as well as an expanded QE program. Following the decision, S&P 500 Futures are up by 0.54% past the 2000 mark and Nasdaq Futures added 0.75% to 4,328.
Meanwhile, a further fall in oil prices could still weigh on U.S. markets. Analysts have been warning that any uptick in prices of oil is faint unless producers take tangible actions to support prices and cut production output. The beginning of maintenance period across several refineries will dampen oil demand while the problem of an oversupplied oil market persists.
Policy Decisions weigh
Barclays has already indicated that Saudi Arabia is not in favor of a production cut and might keep production up for the long-term. A policy meeting between oil exporters is scheduled for later this month.
Meanwhile, Asian markets reflected mixed sentiment following the release of consumer price index data in China and interest rate decisions revealed by the Central Banks of South Korea and New Zealand. China’s CPI reported the fastest growth in six months during the month of February. The index increased 1.6% last month and 2.3% year-on-year versus expectations of 1.9%.
New Zealand’s central bank surprised the markets by announcing a rate cut of 0.25% to bring its policy rates to 2.25%. The rate cut highlights the impact of negative interest rates in Europe and Japan.