The euro hit a 14-month high and world shares pushed to a record peak yesterday, as ECB head Mario Draghi said the bank would discuss the future of its two-trillion-euro stimulus programme at one of its next two meetings.
The euro traded as high as $1.1630 from $1.1492 before Mr Draghi began speaking, while bond and stock markets fell but then recovered as the European Central Bank chief also stressed a need for patience concerning its policy.
A record high Wall Street opened little changed, as traders ignored the weakest Philly Fed business index reading since November and instead focused on a fall in jobless claims and upcoming company earnings reports.
With Wall Street steady, MSCI’s 47-country All World index was on track for a 10th straight session of gains, its longest winning streak since February 2015.
Aberdeen Asset Management senior investment manager Patrick O’Donnell said Mr Draghi’s news conference had been “a well-choreographed” attempt to make sure markets did not get ahead of themselves after having been rattled by what they viewed as more hawkish recent comments by him.
As Wall Street’s S&P 500, Dow Jones and Nasdaq markets tried to squeeze out gains, Treasuries and other benchmark bond yields – the key driver of global borrowing costs – drifted lower again.
Ten-year Treasuries were back under 2.25 per cent but did not move far as oil added to a near two per cent gain it made in the previous session, when falling US crude inventories lifted prices ahead of an Opec meeting next week.
In the currency markets, the dollar was being knocked back again by a euro that is up almost 10 per cent so far this year. Mr Draghi said he and his colleagues had discussed the rise at their meeting, a comment that had little market impact.
Britain’s pound stumbled too, falling back below $1.30 after renewed talk of Britain leaving the EU without a replacement trade deal, which offset slightly better-than-expected retail sales numbers.
EU Brexit negotiator Michel Barnier said this week’s round of negotiations with the UK showed a “fundamental divergence” on how to guarantee citizens’ rights after the split, and that the two sides were not yet at the stage of compromises.
In commodities, Brent crude futures – the international benchmark for oil prices – were flat at $49.75 per barrel. US West Texas Intermediate (WTI) futures also barely budged at $47.18.
Gold slipped to $1,237 an ounce as the dollar drifted while key industrial metal copper held near five-month highs of above $6,000.