Date: Thursday 07 Jun 2012
-PBoC lowers benchmark interest rate
-Hatzius (Goldman) sees US QE3 as soon as June
-Rosengren (Fed): Risks to world economy again on rise
-Spanish long-term yields down slightly after auction
-Merkel douses hopes of ‘big bang’ at EU June summit
-Williams (Fed) says must stand ready to do even more
-Yellen: Fed has scope to do more
Stoxx 600: 1.45%
Ibex 35: 1.05%
The main European equity benchmarks have moved decisively higher following the Chinese central bank’s surprise decision to cut its benchmark interest rate and after a positive outcome to today’s auction of Spanish debt. Nonetheless, some market commentary seems to denote a certain impatience on the part of investors with the pace of progress in resolving the Eurozone crisis.
Precisely as regards the latter, Chancellor’s Angela Merkel’s is being described as having doused expectations for any sort of ‘big bang’ solution at this next June’s European Union summit.
Acting as a backdrop, there has been quite a bit of market chatter this morning regarding the possibility of further quantitative easing (QE) Stateside. In fact, some strategists believe that was the main reason behind yesterday’s rally and nothing that European Central Bank President (ECB) Mario Draghi said. Of note in this regard, this afternoon’s speech (at 2PM) by the president of the Federal Reserve, Ben S.Bernanke, will be closely watched for clues of any possible new QE measures.
Worth noting, John Hatzius at Goldman Sachs is being cited as saying that a third round of quantitative easing may be forthcoming as soon as this next month of June.
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