Closing Report 22.07.2021

European Central Bank leave its rates unchanged 

AMERICAN MARKETS MID DAY

Major stock markets in the US are evolving mixed at european closing time with a trading session disrupted by a higher-than-expected jobless claim report which climb by 51,000 for the week ending July 17 to reach 419,000, hiting a two-month high. Meanwhile, the advance seasonally adjusted insured unemployment rate was unchanged at 2.4% for the week ending July 10. Insured unemployment during the same week was 3,236,000, down by 29,000 from the previous week’s revised level. Also, the GAFAM are rising this Thursday before their quarterly results next week and the drugmaker Biogen Inc gained 1.3% on raising its full-year revenue expectations, while Domino’s Pizza Inc jumped 13% to a record high on upbeat quarterly results.

EUROPEAN MARKETS CLOSING

European shares close mostly higher following the decision of the European Central Bank’s decision to maintain key interest rates unchanged. The Dax rose by 0.60% led by Delivery Hero SE which surged by 5.36% while the FTSE 100 retreated by 0.43% with the personal products company, Uniliver PLC, losing 6.01%. On the data front, the consumer confidence index for the Eurozone declined to worse-than-expected -4.4 points in July, according to a preliminary report published by the European Comission on Thursday. Also, tensions surrounding the Northern Ireland Protocol continued, with British Prime Minister Boris Johnson and German Chancellor Angela Merkel holding another roundof negotiations.

ASIAN PACIFIC MARKETS CLOSING

Asia-Pacific markets closed higher this Thursday benefiting from the positive US company earnings. The Hang Seng jumped by 1.87% while in mainland China, the Shanghai Composite and the Shenzhen Component both rose by respectively 0.34% and 0.15%. In Australia, the ASX 200 grew by 1.29% with the state of Queensland closing its border with New South Wales to curb the spread of Sydney’s COVID-19 outbreak while the National Australia Bank (NAB) released the Quarterly Business Confidence index with a lower-than-expected 17. Meanwhile, the Nikkei 225 is closed for Marine Day.

COMMODITIES & FOREX MARKETS

• Oil is trading back above 70$ helped by a broader market rally
• U.S. crude oil supply data from the EIA released on Wednesday showed a build of just over 2 million barrels last week to July 16
• Gold miner Newmont warns rising costs for materials and labor could persist through next year after profit beats estimates
• EUR/USD surged above 1.18 after ECB talks before quickly return under 1.17

European Central Bank kept its interest rates unchanged

The European Central Bank kept its monetary policy steady on Thursday, but changed its guidance to reflect the recently increased inflation target. The interest rates were unchanged, with the main deposit facility rate remaining at -0.5%, the benchmark refinancing rate at 0% and the marginal lending facility at 0.25%. Meanwhile, the policymakers voted to keep the Pandemic Emergency Purchase which consist of a purchasing of 1.85 trillion euros of bonds until March 2022. However, the euro zone central bank’s Governing Council upgraded its inflation target to a symmetric 2% over the medium term.
The ECB said in a statement that it expects interest rates to remain “at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at two per cent over the medium term.”