Euro drops after ECB trims stimulus; Treasury yields higher
The euro fell against the U.S. dollar on Thursday after the European Central Bank began weaning the euro zone off loose monetary policy, while U.S. Treasury yields rebounded when the U.S. House passed a budget plan that paves a path for tax cuts.
The dollar index <.dxy> rose 0.97 percent, with the euro
"With Draghi`s openness to QE, it`s a victory for the doves," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York.
Benchmark 10-year U.S. Treasury notes
The 30-year bond
The yields had slipped earlier in the day, in line with euro zone bonds, after the ECB`s meeting. However, they recovered after the U.S. House passed a fiscal year 2018 budget, enabling tax legislation to win congressional approval without any Democratic votes.
The legislation is expected to be made public next week.
"If you do have something on the tax issue happen this year, that would be good for growth, it would be good for profits, it would be good for the equity side," said Sameer Samana, a global quantitative and technical strategist at Wells Fargo Investment Institute in St. Louis. "It would be one more reason to at least rethink fixed income holdings."
Gold dipped as the dollar gained against the euro after the ECB decision to trim bond purchases and as it hedged that move by also extending the lifespan of its bond-buying program.
On Wall Street, all three major indexes gained, boosted by upbeat corporate results on one of the busiest days of third-quarter earnings. Seventy-four percent of 231 S&P companies have beat profit expectations as of Thursday.
The Dow Jones Industrial Average <.dji> rose 87.08 points, or 0.37 percent, to 23,416.54, the S&P 500 <.spx> gained 5.06 points, or 0.20 percent, to 2,562.21 and the Nasdaq Composite <.ixic> added 1.98 points, or 0.03 percent, to 6,565.87.
Ford Motor Co
However, Celgene shares, which dropped 20.0 percent, dragged on the S&P 500 and the Nasdaq Composite after the biopharmaceutical company reported disappointing sales for its psoriasis treatment drug Otezla.
European equities were boosted by the weaker euro after the ECB`s meeting. The pan-European FTSEurofirst 300 index closed <.fteu3> up 1.07 percent.
Japan`s Nikkei <.n225> rose 0.15 percent.
Oil prices were little changed after erasing earlier losses. Middle East tensions and Saudi comments about ending a global supply glut offset an unexpected increase in U.S. crude inventories and high U.S. production and exports.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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