EU Dreams of QE: Morning Market Update Aug 25

August 25th, 2014 by

Raining Euros!

Gold is down only slightly this morning, after a dip at the Asian open. Silver is unchanged after recovering from mild softness overnight, while platinum and palladium are also down slightly.

European stocks are up, despite unimpressive economic news, on dreams of Quantitative Easing from the European Central Bank.

ECB president Mario Draghi’s speech at the global central banker conference in Jackson Hole, WY, urged the governments of the European nations to institute measures to boost economic growth. He said that the ECB would be reversing policy to aim for economic stimulus instead of austerity measures.

The dollar hit a fresh 11-month high overnight, and the euro is still near 11-month lows. This, and the thin summertime volumes, are the main factors on gold’s easing in recent days. The next major support level is at $1,270.

Wall St. opened higher, with the S&P 500 up 12 points to touch 2,000 for the very first time. Fed Chairman Janet Yellen said nothing in Jackson Hole to alarm markets, which have seemingly priced in the first increase in benchmark interest rates for mid-year 2015.

The Ukrainian government has accused Russia of not not supplying main battle tanks to pro-Russian rebels in eastern Ukraine, but today charged Putin with allowing the rebels to move through southern Russia with 10 Russian-supplied tanks and two armored personnel carriers, to strike at the Ukrainian town of Novoazovsk, near the Sea of Azov. This is many miles from the nearest rebel stronghold, separated by government-controlled territory.

In other international news, ISIS has decided to switch focus back to Syria, overrunning a government airbase. Meanwhile in Iraq, car bombs targeting Shiite mosques in and around Baghdad are assumed to be the work of this terrorist army, whose offensive to capture the capital of Iraqi Kurdistan was thwarted by airstrikes by the U.S. Navy and military drones.

Back in Europe, French President Hollande as dismissed the cabinet and called on the prime minister to form a new government, after the Economic Minister called the government “the enemy,” and said they were following orders from Germany to implement austerity measures.

If the National Assembly (France’s parliament) doesn’t approve the new cabinet, Hollande will have to dissolve the Assembly and call snap elections, something the far right would love to see.

Tomorrow’s big economic report will be the U.S. durable goods orders, followed by the Case-Shiller Home Price Index, and U.S. consumer confidence.



by Steven Cochran

Gainesville Coins Portfolio Tracker and Financial News