Current location:health >>
European stocks drop as ECB hikes rates
health98272People have gathered around
IntroductionPhoto taken on Feb. 24, 2022 shows the Bull and Bear sculptures outside the Frankfurt Stock Exchange ...
Photo taken on Feb. 24, 2022 shows the Bull and Bear sculptures outside the Frankfurt Stock Exchange in Frankfurt, Germany. (Xinhua/Lu Yang)
It was bond markets where the most substantial impacts were felt. The ECB's announced actions will add to the supply of national bonds available to investors, meaning national treasuries will have to pay higher interest rates in order to attract buyers.
ROME, Dec. 15 (Xinhua) -- Europe's main stock exchanges retreated on Thursday and the euro currency surged against the U.S. dollar after the European Central Bank (ECB) announced it would begin a process of quantitative tightening early next year.
The ECB said on Thursday that starting in March, it would sell off around 15 billion euros (15.9 billion U.S. dollars) in national bonds each month as a way to raise interest rates, reduce the money supply and rein in inflation. Quantitative tightening is generally seen as a drag on near-term economic growth.
Financial markets responded negatively across the board, with the DAX blue-chip index on the Frankfurt Stock Exchange ending the day down 3.3 percent, the IBEX-35 in Madrid retreating 1.7 percent, Paris' CAC-40 losing 3.1 percent, the Italian Stock Exchange's MIB-40 shedding 3.5 percent of its value, and the AEX blue-chip index in Amsterdam slipping 3.2 percent.
Photo taken on July 7, 2022 shows the currency of Euro and US dollar in Brussels, Belgium. (Xinhua/Zheng Huansong)
The euro currency strengthened on the news, opening Thursday's session at 1.068 U.S. dollars per euro before surging to 1.0726 U.S. dollars per euro in afternoon trading before bargain hunters set in. The euro still finished the day up slightly, at 1.0624 per U.S. dollar.
The euro has been hurt against the U.S. dollar over the last year due to monetary policies from the U.S. Federal Reserve that have been more restrictive than those from the ECB.
But it was bond markets where the most substantial impacts were felt. The ECB's announced actions will add to the supply of national bonds available to investors, meaning national treasuries will have to pay higher interest rates in order to attract buyers.
The benchmark ten-year bonds finished the day higher across the 19-nation euro currency zone, with the most highly indebted countries hurt the most due to those countries' dependence on bonds to finance their debt.
People ride scooters past the building of the Bank of Italy in Rome, Italy, on May 1, 2022. (Xinhua/Jin Mamengni)
Yields in Italy climbed 29 basis points to 4.14 percent, while in Greece they surged 14 basis points to 4.18 percent. In both cases, the spread between the yield on their debt and yields in Germany, Europe's largest economy, grew. Higher yields reflect investor nervousness over a country's capacity to keep its debt payments current.
In the case of Italy, Thursday's developments were exacerbated by news from the Bank of Italy, which revealed that the country's public debt totaled 2.77 trillion euros at the end of October, the highest debt level on record. That is an increase of 1 percent -- 27.7 billion euros -- compared to a month earlier.
Photo taken on July 7, 2022 shows the headquarter of the European Central Bank in Frankfurt, Germany. (Xinhua/Shan Weiyi)
European economies have been hit hard this year by rising prices sparked by the ongoing conflict between Russia and Ukraine, which has reduced energy supplies, hurt markets for wheat and other grains, and interrupted international supply lines.
The ECB has said that keeping prices under control is its main policy goal, even if those policies limit economic growth prospects. (1 euro = 1.06 U.S. dollar) ■
Tags:
Reprint:Friends are welcome to share on the Internet, but please indicate the source of the article when reprinting it.“Stellar Space news portal”。http://iceland.downmusic.org/content-48d099876.html
Related articles
Germany's foreign minister visits Kyiv as Ukraine battles to hold off a Russian offensive
healthKYIV, Ukraine (AP) — Germany’s foreign minister arrived in Kyiv on Tuesday in the latest public disp ...
【health】
Read moreWang: China willing to work for global peace and security
healthForeign Minister Wang Yi told diplomatic envoys and representatives of international organizations i ...
【health】
Read moreGlobal South urged to make voices heard
healthAt a time when the world is faced with multiple crises ranging from climate change to conflicts and ...
【health】
Read more
Popular articles
- Nadal returns to Roland Garros to practice amid doubts over fitness and form
- Interview: Somalia seeks drought relief funding in worst humanitarian crisis
- World Robot Conference 2022 held in Beijing
- Flying Tigers veteran visits Great Wall in Beijing
- The Latest
- China's industrial recovery gaining steam despite profits dip
Latest articles
Jodie Turner
New defense minister talks with Russian counterpart
Bolivia urges UN to facilitate peace in Middle East
Xi, Peng Liyuan Extend Chinese New Year Greetings to U.S. Lincoln High School Teachers, Students
Independent UN experts urge Yemen’s Houthis to free detained Baha'i followers
Zimbabwe's gold
LINKS
- SW China's Guizhou awash in fragrant spring blossoms
- Fighter jet maneuvers during training
- Azerbaijan urges top UN court to toss out Armenian case alleging racial discrimination
- World Asia Esports Championship scheduled for September in China
- Qionghai's villages in Hainan showcase rural revitalization with global appeal
- Xavi looks to adapt as Barca prepare for vital week
- Titian's masterpiece 'Flora' breathes vibrancy into Sino
- Xinjiang forward Abdusalam wins CBA MVP award
- FIBA 3x3 Asia Cup 2024 men's quarterfinal match: China vs. Australia
- World Asia Esports Championship scheduled for September in China