Economic Data Super Thursday Gives Markets Plenty to Chew

World stocks were enjoying the view at an all-time high on Friday, lifted by a week of strong U.S. economic data and promises from the European Central Bank that cheap money will be sloshing around for years.

European shares were marginally in the red as the dust settled from Thursday’s forecast-busting U.S. jobs data and ECB meeting, with investors taking the opportunity to lock in profits after the biggest week of gains since March.

A new three-year peak for Asian stocks overnight meant MSCI’s All World share index, which tracks 45 countries, set its fourth consecutive record high, while the dollar, U.S. bond yields and growth-sensitive copper were also up on the week.

“You can’t fight the tape, it’s as simple as that,” said Justin Haque, a broker at Hobart Capital Markets, referring to the deluge of strong data this week, “It’s a very bullish scenario.”

With Wall Street closed later for Independence Day celebrations markets were quieter than usual but there were still pockets of movement.

Yields on lower-rated euro zone bonds continued to fall as analysts combed the details of new long-term loans the ECB has lined up for banks, and after it said on Thursday it stood ready to print money if needed. [GVD/EUR]

The ECB will give banks the opportunity to borrow up to 1 trillion euros for four years at a rate of only 0.25 percent from September in the hope they will lend some of that money to businesses and consumers.

“More liquidity in the system is a boost for bonds,” said Peter Chatwell, fixed income strategist at Credit Agricole.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza