An all-time low for euro zone money market rates bolstered the region’s bond rally and held down the euro on Tuesday, providing clear evidence that the European Central Bank’s latest support measures are gaining traction.
The steady drip-feed of global stimulus also kept world shares inching towards an all-time high as another record close for Wall Street and a three-year high for Asia left them heading for a fifth day of back-to-back gains.
European stocks were happy to take a breather in early trading after gaining almost 10 percent in the last few months, leaving the momentum from last week’s ECB cut in interest rates to continue elsewhere.
The rate banks in the euro zone charge one another to borrow overnight – known as EONIA – hit an all-time low at a just-above-zero 0.053 percent, in a move the ECB hopes will feed through to firms and consumers and boost growth.
The euro was pinned near a four-month low against the dollar at $1.3596, while there was a new all-time low for Portuguese bond yields, a proxy of its borrowing costs, just three years after it needed an EU/IMF bailout.
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