Asian shares meander as ECB, BOJ hold monetary policy steady

Chelsea West
July 22, 2017

Overnight, the major US averages rose between 0.3 percent and 0.6 percent to hit fresh record highs, with sentiment underpinned by rising oil prices, better-than-expected corporate earnings and upbeat housing data.

Futures indicated that Wall Street would have a slow start a day after benchmarks touched record highs.

In the currency market, the Australian dollar held on to its gains against the USA dollar.

Unlike some other major central banks looking to dial back many years of massive easing, the Bank of Japan has shown no inclination to adjust policy and kept monetary policy unchanged at a scheduled meeting on Thursday.

"I think the real action is going to be the September meeting". The Shanghai Composite index slipped 0.2 percent at 3,237.98. But it was still near Tuesday's more than one-year high against the greenback of US$1.1583.

The BOJ cuts its inflation forecast for the FY18 and FY19.

While the Nasdaq inched up 4.96 points or 0.1 percent to 6,390.00, the Dow dipped 28.97 points or 0.1 percent to 21,611.78 and the S&P 500 edged down 0.38 points or less than a tenth of a percent to 2,473.45.

EU Brexit negotiator Michel Barnier also said this week's round of negotiations with the United Kingdom 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.

More news: United Kingdom inflation unexpectedly drops in June

Banking stocks are declining after two straight days of gains. It eventually pulled back though to trade at $0.7909 in Europe.

In late-morning trades, the benchmark S&P/ASX 200 Index is losing 45.70 points or 0.79 percent to 5,715.80, off a low of 5,709.60.

EURO IN FRONTLINE: Europe's single currency is likely to be in the front-line of any changes in Draghi's tone. It's the best-performing G-10 currency this year, climbing 10 percent.

OIL: Benchmark U.S. crude was up 24 cents at $47.36 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, the standard for global oil prices, rose 33 cents to $50.03 per barrel in London. U.S. West Texas Intermediate (WTI) futures also barely budged at $47.18. The dollar dropped, and bonds advanced.

The major European markets also closed mixed on Thursday.

Italian, Portuguese and Spanish government bonds are seen as the biggest beneficiaries of the central bank's ultra-loose monetary policy stance of the past few years, and some worry that the market is not fully reflecting the increased risk these countries now face if the ECB moves towards tighter policy.

France's CAC 40 was little changed at 5,198.69.

Quarterly earnings will continue to be the main focus for USA markets with analysts estimating an 8.7 percent rise in second-quarter earnings and a 4.6 percent increase in revenue for the S&P 500 companies from a year earlier, according to Thomson Reuters I/B/E/S.

Other reports by TheSundaySentinel

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