-Banks deposit EUR324.9bn at ECB, a 7 month low
-ECB (Bonnici) says still has tools at its disposal
-Chinese bank lending ahead of expectations
-Global growth worries weigh on stocks
Ibex 35: -1.50%
Stoxx 600: -0.68%
The main European equity benchmarks are now registering moderate falls, although for the most part they are now trading off their lows. That after the US Federal Reserve and Bank of Japan refrained from further stimulus measures last night, while South Korea and Brasil did not, with the Asian nation´s decision surprising analysts. Currency war again some have said.
As well, for now at least market commentary seems to be converging on the view that the Fed will need to see weaker growth before possibly taking action.
Despite the lower start to the session which ensued an hour afterwards China released -in timely fashion- its latest bank lending figures, which revealed a moderately larger than forecast increase for June. That allowed equity benchmarks to come off their lows.
All of the above ahead of key economic figures due out tomorrow in China.
In any case, and for the extreme short run, the fact remains that the signs of economic weakness the world over have become more widespread, unnerving traders. Today we had more examples of this with lower than expected employment figures out of Australia and with French car-marker Peugeot announcing enormous job cuts, 8,000 no less.
As if all of that were not enough, the latest data from the European Central Bank (ECB) has shown an enormous drop in banks´ overnight deposits, to a 7 month low of EUR324.9bn, from circa EUR800bn previously. Where has it all gone? Recent increased demand at public debt auctions world-wide is thought to be a part of the answer. The cause however is well known, the ECB´s decision to lower its deposit facility. In any case, if financial history gives us any lessons it is one above all: if there is something that markets truly hate it I a conundrum. Thus, many an observers has been left wondering where those funds have headed off towards.
From a sector stand-point the worst performers now on the DJ Stoxx 600 are: technology (-2.06%), basic resources (-2.01%) and telecommunications (-1.38%).
Better than expected data
The Eurozone´s industrial production grew by 0.6% month-on-month in May (Consensus: 0.0%).
Slight retreat in crude futures
Front month crude futures are now off by 0.90% to the $99.27/barrel mark in NYMEX trading.
The euro/dollar is off by 0.22% to the 1.2220 dollar level.