Today we have a very important event on the financial markets which has to do with central banks.
In Europe, after a series of disappointing PMI reports yesterday, today the European Central Bank is holding a policy meeting. Interest rates in the eurozone are already at record lows, but the ECB is expected to announce some kind of dovish loosening of their monetary policy.
In all fairness, inflation data and growth over the past couple of months have been alright in the eurozone. However, the trade war between the US and China, as well as the prospect of a trade conflict between the US and the EU are adding a lot of pressure. Moreover, with hard Brexiteer Boris Johnson confirmed as Prime Minister of the United Kingdom, the stress factors for the eurozone have increased.
As a result, the Asian stock markets have rallied today. In Japan the Nikkei index was up 0.33%. Chinese stocks were up 0.48%, also boosted by the prospect of the US and China continuing their negotiations next week.
The only noticeable loss was on South Korea’s stock market. The country, which is home to many of the world’s leading smartphone and computer developers, is suffering under a politically-inspired supply cut from Japan.
