<a href="https://www.wionews.com/world/deutsche-bank-says-to-slash-18000-jobs-by-2022-233897">Deutsche Bank</a> pared back its revenue growth target on Tuesday, blaming rock-bottom interest rates for hurting its business in a downbeat presentation to investors.

The German bank said it expected revenue at its core banking business to grow by just 1% in the run-up to 2022, half the growth level estimated in July. It put emphasis instead on efforts to cut billions of euros in costs.

Chief Executive <a href="https://www.wionews.com/world/us-congressional-probe-finds-possible-lapses-in-deutsche-bank-controls-report-247969">Christian Sewing</a> pointed to "significant progress" in recent months in turning around the bank in the presentation ahead of an investor day. But the bank highlighted the impact of low interest rates in the eurozone on its business.

Deutsche said such low rates would hurt its retail bank as well as corporate banking in the medium term, but it predicted that growth at its investment bank would partly make up for this.

The bank said it had taken steps to cope with low rates, including lending more and "selectively" passing on to customers the costs it faces for keeping cash at the central bank.

Deutsche Bank also said that the <a href="https://www.wionews.com/world/trump-criticises-federal-reserve-for-not-acting-quickly-as-european-central-bank-249248">European Central Bank</a> had reduced the lender's capital ratio requirement, following a review.

Deutsche Bank pared back its revenue growth target on Tuesday, blaming rock-bottom interest rates for hurting its business in a downbeat presentation to investors.

Deutsche Bank pared back its revenue growth target on Tuesday, blaming rock-bottom interest rates for hurting its business in a downbeat presentation to investors. The German bank said it expected revenue at its core banking business to grow by just 1% in the run-up to 2022, half the growth level estimated in July. It put emphasis instead on efforts to cut billions of euros in costs. Chief Executive Christian Sewing pointed to "significant progress" in recent months in turning around the bank in the presentation ahead of an investor day. But the bank highlighted the impact of low interest rates in the eurozone on its business. Deutsche said such low rates would hurt its retail bank as well as corporate banking in the medium term, but it predicted that growth at its investment bank would partly make up for this. The bank said it had taken steps to cope with low rates, including lending more and "selectively" passing on to customers the costs it faces for keeping cash at the central bank. Deutsche Bank also said that the European Central Bank had reduced the lender's capital ratio requirement, following a review.

Deutsche Bank predicts meagre growth due to low rates

The European Parliament on Tuesday approved <a href="https://www.wionews.com/world/christine-lagarde-resigns-as-international-monetary-fund-chief-starting-race-for-her-successor-236536">outgoing IMF chief</a> Christine Lagarde as the next boss of the European Central Bank, which last week announced massive stimulus for the sluggish eurozone despite divisions among its governors.

<a href="https://www.wionews.com/world/lagarde-temporarily-steps-down-as-imf-chief-american-economist-david-lipton-named-interim-leader-232570">Lagarde</a>, who was absent for the vote, won backing from 394 MEPs, with 206 votings against and 49 abstaining in a secret ballot.

Some criticised her not turning up.

The parliament's green light is just a recommendation.

The final decision on her appointment is up to EU leaders in a mid-October summit.

She is expected to easily clinch that confirmation as the leaders put her forward for the ECB post back in July.

Lagarde, a former French economy minister and head of the International Monetary Fund for the past eight years, is expected to largely follow the course set by departing ECB president Mario Draghi.

Draghi was hailed seven years ago for saving the eurozone from the debilitating crisis by vowing "the ECB is ready to do whatever it takes".

But his decision last Thursday to have the ECB intervene again with quantitative easing (QE) from November and a cut to the interest paid on banks' deposits deeper into negative territory has ruffled the feathers of some EU states.

Germany and the Netherlands notably accused Draghi of going too far. Sources told AFP that around 10 of the 25 ECB governors were against relaunching QE.

Draghi had underlined three challenges facing the ECB and its goal of price stability: a slowing eurozone economy, looming trade protectionism and Brexit, and the bank's degrading economic forecasts.

He is to leave his job to Lagarde after hosting a last monetary policy meeting in October.

The European Parliament on Tuesday approved outgoing IMF chief Christine Lagarde as the next boss of the European Central Bank, which last week announced massive stimulus for the sluggish eurozone despite divisions among its governors.

The European Parliament on Tuesday approved outgoing IMF chief Christine Lagarde as the next boss of the European Central Bank, which last week announced massive stimulus for the sluggish eurozone despite divisions among its governors. Lagarde, who was absent for the vote, won backing from 394 MEPs, with 206 votings against and 49 abstaining in a secret ballot. Some criticised her not turning up. The parliament's green light is just a recommendation. The final decision on her appointment is up to EU leaders in a mid-October summit. She is expected to easily clinch that confirmation as the leaders put her forward for the ECB post back in July. Lagarde, a former French economy minister and head of the International Monetary Fund for the past eight years, is expected to largely follow the course set by departing ECB president Mario Draghi. Draghi was hailed seven years ago for saving the eurozone from the debilitating crisis by vowing "the ECB is ready to do whatever it takes". But his decision last Thursday to have the ECB intervene again with quantitative easing (QE) from November and a cut to the interest paid on banks' deposits deeper into negative territory has ruffled the feathers of some EU states. Germany and the Netherlands notably accused Draghi of going too far. Sources told AFP that around 10 of the 25 ECB governors were against relaunching QE. Draghi had underlined three challenges facing the ECB and its goal of price stability: a slowing eurozone economy, looming trade protectionism and Brexit, and the bank's degrading economic forecasts. He is to leave his job to Lagarde after hosting a last monetary policy meeting in October.

European Parliament approves Lagarde as next European Central Bank chief

<a href="wionews.com/world/trump-fed-should-get-us-interest-rate-down-to-zero-or-less-249064">President Donald Trump</a> attacked the Federal Reserve again Thursday for not "acting quickly" like its European counterpart to provide stimulus to the US economy.

After the European Central Bank unveiled a massive stimulus program earlier Thursday, Trump said on Twitter, "They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting US&nbsp;exports."

"And the Fed sits, and sits, and sits," Trump said in the latest blast against the US central bank.

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European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1172120964232093697?ref_src=twsrc%5Etfw">September 12, 2019</a></blockquote>
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Trump has maintained a relentless campaign against the Fed and its chair, Jerome Powell, with near-daily tweets criticizing the independent institution. In an outburst on Twitter on Wednesday, he called for the Fed to bring interest rates back down to zero.

The Fed's policy committee meets again next week and is widely expected to deliver another cut in interest rates, after Powell flagged the uncertainty caused by Trump's trade conflict with China and said the central bank is prepared to act to support the economy.

Investors overwhelmingly expect the Fed to deliver a 25-basis-point rate cut next week, but cutting to zero would be an extreme move reserved only for a severe economic crisis.

After raising the benchmark lending rate four times last year, to a range of 2.0-2.25 per cent, the central bank cut in July for the first time in more than a decade, partly as insurance against the impact of trade uncertainties on the economy.

President Donald Trump attacked the Federal Reserve again Thursday for not "acting quickly" like its European counterpart to provide stimulus to the US economy. After the European Central Bank unveiled a massive stimulus program earlier Thursday, Trump said on Twitter, "They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting US exports.

President Donald Trump attacked the Federal Reserve again Thursday for not "acting quickly" like its European counterpart to provide stimulus to the US economy. After the European Central Bank unveiled a massive stimulus program earlier Thursday, Trump said on Twitter, "They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting US exports." "And the Fed sits, and sits, and sits," Trump said in the latest blast against the US central bank. European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest! — Donald J. Trump (@realDonaldTrump) September 12, 2019 × Trump has maintained a relentless campaign against the Fed and its chair, Jerome Powell, with near-daily tweets criticizing the independent institution. In an outburst on Twitter on Wednesday, he called for the Fed to bring interest rates back down to zero. The Fed's policy committee meets again next week and is widely expected to deliver another cut in interest rates, after Powell flagged the uncertainty caused by Trump's trade conflict with China and said the central bank is prepared to act to support the economy. Investors overwhelmingly expect the Fed to deliver a 25-basis-point rate cut next week, but cutting to zero would be an extreme move reserved only for a severe economic crisis. After raising the benchmark lending rate four times last year, to a range of 2.0-2.25 per cent, the central bank cut in July for the first time in more than a decade, partly as insurance against the impact of trade uncertainties on the economy.

Trump criticises Federal Reserve for not 'acting quickly' as European Central Bank

Asian markets mostly rose Wednesday with a broadly upbeat tone across trading floors ahead of major meetings at the European and US central banks, while there is also a growing sense of optimism over <a href="https://www.wionews.com/world/china-us-trade-talks-to-restart-after-g20-tariff-truce-239483">China-US trade talks</a>.

News that <a href="https://www.wionews.com/india-news/i-asked-nsa-john-bolton-to-resign-tweets-us-president-donald-trump-248901">Donald Trump</a> had fired his fervently hawkish national security adviser also lifted sentiment with analysts saying it could see the White House take a less strident approach and ease geopolitical tensions.

With the global economy sputtering, attention has turned increasingly to central banks as investors look for more stimulus.

Watch Vidoe:&nbsp;US President Donald Trump fires NSA John Bolton

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On Thursday the European Central Bank holds one of its most anticipated gatherings and hopes are for a series of fresh measures including a possible interest rate cut, fresh bond-buying quantitative easing (QE) or other loosening tools.

That is followed by the Federal Reserve's board meeting next week, where it is tipped to announce another reduction in borrowing costs as the world's top economy which has so far been the strongest globally stutters.

"With the expectation of the resumption of quantitative easing by the ECB&nbsp;and a rate cut by the Federal Reserve next week, the risk environment has solidified and tempted investors out of hiding from the bond markets and back into equities," said Jeffrey Halley, senior market analyst at OANDA.

In the afternoon trade, Hong Kong climbed 1.6 per cent as investors made the most of the upbeat mood to pick up cheap stocks after months of sometimes violent protests in the city weighed on the stock market.

Tokyo finished one per cent higher, Singapore put on more than one per cent, Seoul rose 0.8 per cent, Sydney gained 0.4 per cent and Taipei added 0.3 per cent, while Manila, Mumbai, Bangkok, and Jakarta also posted gains.

However, Shanghai was fell 0.4 per cent, with little major reaction to the news that China had listed 16 US categories of goods it would exempt from tariffs, ahead of planned top-level trade talks next month. Dealers also appeared to brush off Beijing's decision on Tuesday to lift limits on foreign investment in the country.

Wellington tumbled almost two per cent as Prime Minister Jacinda Ardern's government was rocked by its handling of sexual assault allegations against a top Labour Party staffer.

In early trade London rose 0.5 per cent, Frankfurt jumped 0.6 per cent and Paris edged up 0.3 per cent.

Trump's decision to sack John Bolton as a leading security adviser raised the possibility of an easing of tensions between the US and several nations, particularly Iran.

The controversial <a href="https://www.wionews.com/world/us-security-adviser-john-bolton-to-urge-tougher-uk-stance-on-iran-and-china-242307">Bolton</a> was closely linked to the invasion of Iraq and other past aggressive US foreign policy decisions and was seen as one of the main driving forces in Trump's muscular approach to Tehran, North Korea, and Venezuela, among others.

Stephen Innes at AxiTrader said that while the move did not necessarily mean a huge change in policy direction, "it does eliminate the most vocal advocate for US military-enforced regime change in the Trump administration".

He added that "from a geopolitical risk perspective, it does lessen war risk premiums, especially in Syria, Venezuela, and Iran and opens the door to more friendly discussion with North Korea".

However, the possibility of dialling down in the stand-off between the US and Iran led to a plunge Tuesday in the price of oil, with WTI diving almost three per cent from an intraday high and Brent shedding 2.5 per cent.

The two contracts later clawed back some of the losses on bargain-buying expectations for more output cuts by leading producers led by Saudi Arabia.

In share trading companies linked to Apple enjoyed healthy buying after the US tech giant unveiled new iPhones, including a lower-priced offering, and set launch dates for its original video offering as well as its game subscription service.

In Tokyo, Alps Alpine surged three per cent, Japan Display put on nearly three per cent and Sharp rallied more than four per cent, while LG Display in Seoul was up two per cent in Seoul. Taipei-listed Foxconn rose by 0.2 per cent.

On forex markets, the positive vibe helped the dollar up against the safe-haven yen, while higher-yielding, riskier currencies edged up against the greenback.

The pound held its recent gains as Prime Minister Boris Johnson said he was pushing to strike a divorce agreement with the European Union, having lost a series of key votes to MPs opposed to a no-deal Brexit.

Asian markets mostly rose Wednesday with a broadly upbeat tone across trading floors ahead of major meetings at the European and US central banks, while there is also a growing sense of optimism over China-US trade talks.

Asian markets mostly rose Wednesday with a broadly upbeat tone across trading floors ahead of major meetings at the European and US central banks, while there is also a growing sense of optimism over China-US trade talks. News that Donald Trump had fired his fervently hawkish national security adviser also lifted sentiment with analysts saying it could see the White House take a less strident approach and ease geopolitical tensions. With the global economy sputtering, attention has turned increasingly to central banks as investors look for more stimulus. Watch Vidoe: US President Donald Trump fires NSA John Bolton × On Thursday the European Central Bank holds one of its most anticipated gatherings and hopes are for a series of fresh measures including a possible interest rate cut, fresh bond-buying quantitative easing (QE) or other loosening tools. That is followed by the Federal Reserve's board meeting next week, where it is tipped to announce another reduction in borrowing costs as the world's top economy which has so far been the strongest globally stutters. "With the expectation of the resumption of quantitative easing by the ECB and a rate cut by the Federal Reserve next week, the risk environment has solidified and tempted investors out of hiding from the bond markets and back into equities," said Jeffrey Halley, senior market analyst at OANDA. In the afternoon trade, Hong Kong climbed 1.6 per cent as investors made the most of the upbeat mood to pick up cheap stocks after months of sometimes violent protests in the city weighed on the stock market. Tokyo finished one per cent higher, Singapore put on more than one per cent, Seoul rose 0.8 per cent, Sydney gained 0.4 per cent and Taipei added 0.3 per cent, while Manila, Mumbai, Bangkok, and Jakarta also posted gains. However, Shanghai was fell 0.4 per cent, with little major reaction to the news that China had listed 16 US categories of goods it would exempt from tariffs, ahead of planned top-level trade talks next month. Dealers also appeared to brush off Beijing's decision on Tuesday to lift limits on foreign investment in the country. Wellington tumbled almost two per cent as Prime Minister Jacinda Ardern's government was rocked by its handling of sexual assault allegations against a top Labour Party staffer. In early trade London rose 0.5 per cent, Frankfurt jumped 0.6 per cent and Paris edged up 0.3 per cent. Trump's decision to sack John Bolton as a leading security adviser raised the possibility of an easing of tensions between the US and several nations, particularly Iran. The controversial Bolton was closely linked to the invasion of Iraq and other past aggressive US foreign policy decisions and was seen as one of the main driving forces in Trump's muscular approach to Tehran, North Korea, and Venezuela, among others. Stephen Innes at AxiTrader said that while the move did not necessarily mean a huge change in policy direction, "it does eliminate the most vocal advocate for US military-enforced regime change in the Trump administration". He added that "from a geopolitical risk perspective, it does lessen war risk premiums, especially in Syria, Venezuela, and Iran and opens the door to more friendly discussion with North Korea". However, the possibility of dialling down in the stand-off between the US and Iran led to a plunge Tuesday in the price of oil, with WTI diving almost three per cent from an intraday high and Brent shedding 2.5 per cent. The two contracts later clawed back some of the losses on bargain-buying expectations for more output cuts by leading producers led by Saudi Arabia. In share trading companies linked to Apple enjoyed healthy buying after the US tech giant unveiled new iPhones, including a lower-priced offering, and set launch dates for its original video offering as well as its game subscription service. In Tokyo, Alps Alpine surged three per cent, Japan Display put on nearly three per cent and Sharp rallied more than four per cent, while LG Display in Seoul was up two per cent in Seoul. Taipei-listed Foxconn rose by 0.2 per cent. On forex markets, the positive vibe helped the dollar up against the safe-haven yen, while higher-yielding, riskier currencies edged up against the greenback. The pound held its recent gains as Prime Minister Boris Johnson said he was pushing to strike a divorce agreement with the European Union, having lost a series of key votes to MPs opposed to a no-deal Brexit.

Asian markets extend gains over optimism on China-US trade talks

Bank of Japan Governor Haruhiko Kuroda said cutting interest rates further into negative territory is among the bank's policy options, according to an interview with the Nikkei newspaper published on Friday.

Cutting rates "further into the negative zone is always an option," the newspaper quoted him as saying in the interview, held on Thursday.

Kuroda said while Japan's economy was sustaining momentum to achieve the BOJ's 2 per cent&nbsp;inflation target, risks surrounding the overseas economy were heightening.

"There are various things we can do, such as combining various tools or enhancing them," Kuroda was quoted as saying on what the BOJ could do if it were to ease again.

But Kuroda also stressed that the BOJ must take into account the impact any policy change could have on Japan's banking system and financial market functions.

Life insurers and pension funds have seen the return on their investments decline significantly due to falling long-term yields, which could hurt consumer sentiment, he said.

Kuroda also said yields on super-long Japanese government bonds with maturities of 20 or 30 years have "fallen a bit too far."

Markets are rife with speculation the BOJ could ease policy as early as this month to fend off an unwelcome yen spike that could be caused by expected monetary easing steps by the US Federal Reserve and the European Central Bank.

But some BOJ policymakers are wary of ramping up stimulus due to the rising cost of prolonged easings, such as the strain years of ultra-low interest rates are inflicting on financial institutions

Bank of Japan Governor Haruhiko Kuroda said cutting interest rates further into negative territory is among the bank's policy options, according to an interview with the Nikkei newspaper published on Friday.

Bank of Japan Governor Haruhiko Kuroda said cutting interest rates further into negative territory is among the bank's policy options, according to an interview with the Nikkei newspaper published on Friday. Cutting rates "further into the negative zone is always an option," the newspaper quoted him as saying in the interview, held on Thursday. Kuroda said while Japan's economy was sustaining momentum to achieve the BOJ's 2 per cent inflation target, risks surrounding the overseas economy were heightening. "There are various things we can do, such as combining various tools or enhancing them," Kuroda was quoted as saying on what the BOJ could do if it were to ease again. But Kuroda also stressed that the BOJ must take into account the impact any policy change could have on Japan's banking system and financial market functions. Life insurers and pension funds have seen the return on their investments decline significantly due to falling long-term yields, which could hurt consumer sentiment, he said. Kuroda also said yields on super-long Japanese government bonds with maturities of 20 or 30 years have "fallen a bit too far." Markets are rife with speculation the BOJ could ease policy as early as this month to fend off an unwelcome yen spike that could be caused by expected monetary easing steps by the US Federal Reserve and the European Central Bank. But some BOJ policymakers are wary of ramping up stimulus due to the rising cost of prolonged easings, such as the strain years of ultra-low interest rates are inflicting on financial institutions

Bank of Japan's Kuroda says deepening negative rates is among options: Nikkei

Investors continued to pump in money into bonds and shunned equities in the past week, Bank of America Merrill Lynch (BAML) said on Friday, amid worries of a corporate earnings recession and trade tensions across the world.

BAML said its global earnings per share (EPS) "growth model" suggested an earnings recession. The model forecasts a 7.5% drop in EPS in the next 12 months.

With all major central banks coming out with less-dovish guidance, in the week to July 31 investors played it safe by pouring $10.5 billion into bonds while pulling some $1.7 billion money out of equities.

The US was the only region to attract investors, who pumped $4.8 billion into equities, while European and Japan stocks had outflows. Money has flowed out of European equities in 70 of the past 73 weeks.

Global equities were roiled last week by central bank comments that fell-short of expectations. European markets took a sharp hit after the European Central Bank kept interest&nbsp;rates intact and its outlook on easing came in below market expectations.

The US Federal Reserve cut interest rates in line with market expectations on Wednesday but poured cold water on market expectations of a lengthy easing cycle sending global stocks lower.

Investors continued to pump in money into bonds and shunned equities in the past week, Bank of America Merrill Lynch (BAML) said on Friday, amid worries of a corporate earnings recession and trade tensions across the world.

Investors continued to pump in money into bonds and shunned equities in the past week, Bank of America Merrill Lynch (BAML) said on Friday, amid worries of a corporate earnings recession and trade tensions across the world. BAML said its global earnings per share (EPS) "growth model" suggested an earnings recession. The model forecasts a 7.5% drop in EPS in the next 12 months. With all major central banks coming out with less-dovish guidance, in the week to July 31 investors played it safe by pouring $10.5 billion into bonds while pulling some $1.7 billion money out of equities. The US was the only region to attract investors, who pumped $4.8 billion into equities, while European and Japan stocks had outflows. Money has flowed out of European equities in 70 of the past 73 weeks. Global equities were roiled last week by central bank comments that fell-short of expectations. European markets took a sharp hit after the European Central Bank kept interest rates intact and its outlook on easing came in below market expectations. The US Federal Reserve cut interest rates in line with market expectations on Wednesday but poured cold water on market expectations of a lengthy easing cycle sending global stocks lower.

Fears of earnings recession keep investors away from stocks: Bank of America Merrill Lynch

<a href="https://www.wionews.com/business-%26-economy/gold-prices-slip-for-sixth-session-as-dollar-trades-near-1-year-high-153068">Gold prices</a> firmed on Tuesday ahead of a meeting of the <a href="https://www.wionews.com/business-economy/nasdaq-ends-at-record-high-dollar-falls-as-us-fed-signals-possible-rate-cut-234814">US Federal Reserve</a> where it is expected to signal how big an interest rate cut the world's biggest economy could take.

Spot gold was up 0.1 per cent to1,427.85 dollars per ounce as of 0954 GMT. US gold futures were up 0.6 per cent at1,428.30 dollars per ounce.

"The big question is what the tone of the Fed will be tomorrow. Interest rates are overwhelmingly likely to be cut. It's just a question of by how much," said Mitsubishi analyst Jonathan Butler.&nbsp;

"Gold is still at 6-year highs. Although it has been close to1,450 dollars recently, it seems to have found a level around1,425 dollars."

Investors awaited cues on the Fed's two-day monetary policy meeting beginning later in the session, which is expected to result in a 25-basis point cut in interest rates. If implemented, it would be the central bank's first rate cut in a decade.

The bank would be joining peers such as the European Central Bank in signalling the need for rate cuts. The <a href="https://www.wionews.com/business-economy/asia-stocks-higher-ahead-of-fed-pound-pressured-by-fresh-brexit-pain-239341">Bank of Japan</a> has also said it would ease "without hesitation" if the economy lost momentum in order to achieve its inflation target.

Gains in the dollar index, which touched a two-month high of 98.206 on the back of a weaker sterling, helped cap the rise in bullion.

"Liquidity is still thin as traders seem to be holding back before the Fed gives its views on monetary policy," said Benjamin Lu, an analyst at Phillip Futures, adding that a firm dollar was putting pressure on gold prices.&nbsp;

US-China trade negotiations, which begin in Shanghai on Tuesday, were also in the spotlight, although expectations for progress during the two-day meeting are low, with the markets hoping the two sides can at least detail commitments for goodwill gestures.&nbsp;

On the technical side, spot gold remains neutral in a range of 1,412-1,427 dollars per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.&nbsp;

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.83 per cent to 824.89 tonnes on Monday from Friday.

Among other precious metals, silver rose 0.2 per cent to16.49 dollars, while platinum edged 0.2 per cent higher to 877.29dollars.

Palladium dropped 0.5 per cent to1,545.31 dollars per ounce, after touching a near two-week high in the previous session.

Gold prices firmed on Tuesday ahead of a meeting of the US Federal Reserve where it is expected to signal how big an interest rate cut the world's biggest economy could take.

Gold prices firmed on Tuesday ahead of a meeting of the US Federal Reserve where it is expected to signal how big an interest rate cut the world's biggest economy could take. Spot gold was up 0.1 per cent to1,427.85 dollars per ounce as of 0954 GMT. US gold futures were up 0.6 per cent at1,428.30 dollars per ounce. "The big question is what the tone of the Fed will be tomorrow. Interest rates are overwhelmingly likely to be cut. It's just a question of by how much," said Mitsubishi analyst Jonathan Butler. "Gold is still at 6-year highs. Although it has been close to1,450 dollars recently, it seems to have found a level around1,425 dollars." Investors awaited cues on the Fed's two-day monetary policy meeting beginning later in the session, which is expected to result in a 25-basis point cut in interest rates. If implemented, it would be the central bank's first rate cut in a decade. The bank would be joining peers such as the European Central Bank in signalling the need for rate cuts. The Bank of Japan has also said it would ease "without hesitation" if the economy lost momentum in order to achieve its inflation target. Gains in the dollar index, which touched a two-month high of 98.206 on the back of a weaker sterling, helped cap the rise in bullion. "Liquidity is still thin as traders seem to be holding back before the Fed gives its views on monetary policy," said Benjamin Lu, an analyst at Phillip Futures, adding that a firm dollar was putting pressure on gold prices. US-China trade negotiations, which begin in Shanghai on Tuesday, were also in the spotlight, although expectations for progress during the two-day meeting are low, with the markets hoping the two sides can at least detail commitments for goodwill gestures. On the technical side, spot gold remains neutral in a range of 1,412-1,427 dollars per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.83 per cent to 824.89 tonnes on Monday from Friday. Among other precious metals, silver rose 0.2 per cent to16.49 dollars, while platinum edged 0.2 per cent higher to 877.29dollars. Palladium dropped 0.5 per cent to1,545.31 dollars per ounce, after touching a near two-week high in the previous session.

Gold firms ahead of expected Federal interest rate cut

Asian share prices opened a tad lower on Friday on mixed US earnings reports and the euro held above two-year lows struck overnight after the European Central Bank held interest rates steady, though officials said a cut was certain in September.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.15% while Japan's Nikkei dipped 0.3%.

Wall Street shares fell from record highs on Thursday, with the S&amp;P 500 losing 0.53%, following a flurry of downbeat quarterly results from Ford Motor and other companies.

But several companies that announced their results after the market had closed on Thursday generally beat market expectations, and their shares rose in after-hours trade.

Google parent Alphabet rose 8.4%, Intel Corp 5.6% and Starbucks 6.4%. Amazon, however, dipped 1.7% on its first profit miss in two years.

US stock futures were little changed in Asia.

"Some capital goods makers have reported soft earnings but otherwise US earnings have been generally good, partly because investors had already lowered their expectations," said Hitoshi Asaoka, senior strategist at Asset Management One.

"Still, with US share prices already at record levels, further gains are likely to be limited unless we see clearer signs of recovery in global demand," he said.

A rally in global bonds ran out of steam after European Central Bank President Mario Draghi cautioned about pulling the trigger too quickly even though he signalled another round of monetary easing.

ECB Officials told Reuters after the meeting that an interest rate cut in September appeared certain, while government bond purchases and a revamped policy message were also likely.

The euro's overnight index swaps are pricing in a cut of more than 10 basis points in September.

The 10-year German government bond yield initially hit a record low of minus 0.463 per cent but ended the day up slightly at minus 0.407 per cent.

The US 10-year Treasuries yield also rose 3 basis points to 2.079 per cent on Thursday and traded at 2.107 per cent in the following Asian session.

Also helping to stem falls in bond yields, new orders for key US-made capital goods surged in June, suggesting some improvement in business investment.

In the currency market, the euro bounced back to at $1.11465 in Asian trade, after sinking to $1.1101 on Thursday, its lowest since May 2017.

The yen was little changed against the dollar at 108.67 yen per dollar.

Oil prices held firm on rising tensions between the West and Iran and a big decline in US crude stockpiles, though gains were held in check by worries about slowing growth in major economies.

Asian share prices opened a tad lower on Friday on mixed US earnings reports and the euro held above two-year lows struck overnight after the European Central Bank held interest rates steady, though officials said a cut was certain in September.

Asian share prices opened a tad lower on Friday on mixed US earnings reports and the euro held above two-year lows struck overnight after the European Central Bank held interest rates steady, though officials said a cut was certain in September. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.15% while Japan's Nikkei dipped 0.3%. Wall Street shares fell from record highs on Thursday, with the S&P 500 losing 0.53%, following a flurry of downbeat quarterly results from Ford Motor and other companies. But several companies that announced their results after the market had closed on Thursday generally beat market expectations, and their shares rose in after-hours trade. Google parent Alphabet rose 8.4%, Intel Corp 5.6% and Starbucks 6.4%. Amazon, however, dipped 1.7% on its first profit miss in two years. US stock futures were little changed in Asia. "Some capital goods makers have reported soft earnings but otherwise US earnings have been generally good, partly because investors had already lowered their expectations," said Hitoshi Asaoka, senior strategist at Asset Management One. "Still, with US share prices already at record levels, further gains are likely to be limited unless we see clearer signs of recovery in global demand," he said. A rally in global bonds ran out of steam after European Central Bank President Mario Draghi cautioned about pulling the trigger too quickly even though he signalled another round of monetary easing. ECB Officials told Reuters after the meeting that an interest rate cut in September appeared certain, while government bond purchases and a revamped policy message were also likely. The euro's overnight index swaps are pricing in a cut of more than 10 basis points in September. The 10-year German government bond yield initially hit a record low of minus 0.463 per cent but ended the day up slightly at minus 0.407 per cent. The US 10-year Treasuries yield also rose 3 basis points to 2.079 per cent on Thursday and traded at 2.107 per cent in the following Asian session. Also helping to stem falls in bond yields, new orders for key US-made capital goods surged in June, suggesting some improvement in business investment. In the currency market, the euro bounced back to at $1.11465 in Asian trade, after sinking to $1.1101 on Thursday, its lowest since May 2017. The yen was little changed against the dollar at 108.67 yen per dollar. Oil prices held firm on rising tensions between the West and Iran and a big decline in US crude stockpiles, though gains were held in check by worries about slowing growth in major economies.

Asian shares dip on mixed US earnings, euro off 2-year low as ECB holds

The <a href="https://www.wionews.com/world/european-commission-could-slap-3-billion-euro-fine-on-italy-for-excessive-debt-deputy-pm-salvini-222359">European Commission</a> lowered its estimates on Wednesday for <a href="https://www.wionews.com/business-economy/eurozone-inflation-falls-sharply-amid-slowdown-fears-224221">eurozone growth</a> and inflation, saying uncertainty over US trade policy posed a major risk to the bloc.

In its quarterly economic forecasts, the European Union's executive arm said prices would grow less than previously predicted, pushing the inflation rate further off the European Central Bank's target of close to but less than 2 per cent.

The commission confirmed its prediction that economic growth in the euro zone would slow this year to 1.2 per cent from 1.9 per cent in 2018. It also revised down its estimate for next year's growth, which is now seen at 1.4 per cent instead of the 1.5 per cent forecast in May.

Risks for the bloc have increased, the commission said, and mostly come from "the elevated uncertainty" around United States' trade policy, as Washington keeps threatening punitive tariffs on a broad range of EU products.

Fears of increased trade tensions "could also trigger a shift in global risk sentiment at times when valuations appear stretched across many asset classes", the EU economics commissioner Pierre Moscovici told a news conference

"This could lead to rapid tightening of global financial conditions," he added.

The weaker economic outlook contributed to a downward revision of inflation expectations, the commission said, cutting its estimate to 1.3 per cent for this year and next from the 1.4 per cent it previously estimated for both years.

This year's forecast matches the ECB's projection, but for 2020 the commission's estimate is lower than the 1.4 per cent rate forecast by the central bank in its latest projections, released in June. That could give the ECB a reason to push ahead with fresh stimulus.

The commission confirmed the economic slowdown in the euro zone was mostly caused by weaker growth in Germany, the euro zone's largest economy, and Italy, its third largest.

German growth will slow to 0.5 per cent this year, in line with earlier predictions, after reaching 1.4 per cent in 2018. Growth is expected to return to 1.4 per cent next year, less than the 1.5 per cent the commission predicted earlier.

Forecasts for Italy remained unchanged, reiterating its economy will barely grow this year, seeing the worst growth rate in the whole EU. Next year's growth is expected to accelerate to 0.7 per cent but remain the slowest in the bloc.

France's economy will expand 1.3 per cent this year and 1.4 per cent in 2020, the commission estimated, leaving unchanged its forecast for this year but lowering the estimate for the next, earlier seen at 1.5 per cent.

The commission maintained unchanged its forecasts for Britain, whose economy is foreseen growing 1.3 per cent this year and next. However, the projection does not take into account possible trade disruptions caused by a no-deal Brexit.

The European Commission lowered its estimates on Wednesday for eurozone growth and inflation, saying uncertainty over US trade policy posed a major risk to the bloc.

The European Commission lowered its estimates on Wednesday for eurozone growth and inflation, saying uncertainty over US trade policy posed a major risk to the bloc. In its quarterly economic forecasts, the European Union's executive arm said prices would grow less than previously predicted, pushing the inflation rate further off the European Central Bank's target of close to but less than 2 per cent. The commission confirmed its prediction that economic growth in the euro zone would slow this year to 1.2 per cent from 1.9 per cent in 2018. It also revised down its estimate for next year's growth, which is now seen at 1.4 per cent instead of the 1.5 per cent forecast in May. Risks for the bloc have increased, the commission said, and mostly come from "the elevated uncertainty" around United States' trade policy, as Washington keeps threatening punitive tariffs on a broad range of EU products. Fears of increased trade tensions "could also trigger a shift in global risk sentiment at times when valuations appear stretched across many asset classes", the EU economics commissioner Pierre Moscovici told a news conference "This could lead to rapid tightening of global financial conditions," he added. The weaker economic outlook contributed to a downward revision of inflation expectations, the commission said, cutting its estimate to 1.3 per cent for this year and next from the 1.4 per cent it previously estimated for both years. This year's forecast matches the ECB's projection, but for 2020 the commission's estimate is lower than the 1.4 per cent rate forecast by the central bank in its latest projections, released in June. That could give the ECB a reason to push ahead with fresh stimulus. The commission confirmed the economic slowdown in the euro zone was mostly caused by weaker growth in Germany, the euro zone's largest economy, and Italy, its third largest. German growth will slow to 0.5 per cent this year, in line with earlier predictions, after reaching 1.4 per cent in 2018. Growth is expected to return to 1.4 per cent next year, less than the 1.5 per cent the commission predicted earlier. Forecasts for Italy remained unchanged, reiterating its economy will barely grow this year, seeing the worst growth rate in the whole EU. Next year's growth is expected to accelerate to 0.7 per cent but remain the slowest in the bloc. France's economy will expand 1.3 per cent this year and 1.4 per cent in 2020, the commission estimated, leaving unchanged its forecast for this year but lowering the estimate for the next, earlier seen at 1.5 per cent. The commission maintained unchanged its forecasts for Britain, whose economy is foreseen growing 1.3 per cent this year and next. However, the projection does not take into account possible trade disruptions caused by a no-deal Brexit.

Euro zone growth, inflation outlook cut as risks from US trade grow

Two women have won the backing of the EU's leaders to head the European commission and European Central Bank. Watch full video to know more.

Germany's Ursula von der Leyen may become first European Commission President

European Union leaders met on Sunday to decide who wins the bloc's top posts, with Dutch socialist Frans Timmermans in pole position to be named the EU's next chief executive, diplomats and officials said. EU leaders were also meant to choose the next president of the European Central Bank (ECB), but that decision seems now likely to be postponed for lack of consensus. The other main jobs up for grabs are the presidency of the European Council - grouping the EU governments - the EU's foreign policy chief. Leaders are seeking a balance of men and women in the top positions, and also a balance between eastern and western member states.

European Union leaders meet to decide on bloc's top jobs

Asian shares hit five-week highs on Wednesday as investors hoped the Federal Reserve would follow the lead of the European Central Bank and open the door to future rate cuts at its policy meeting later in the day.

Indeed, ECB President Mario Draghi's shock about-face on easing fuelled talk of a worldwide wave of central bank stimulus, firing up stocks, bonds and commodities.

Adding to the cheer was news US President Donald Trump would meet with Chinese President Xi Jinping at the G20 summit later this month, and that trade talks would restart after a recent lull. But most analysts do not expect a decisive breakthrough.

"We expect no real change following the G20 sideline meeting. (But) the fact that both sides are talking should at least postpone thoughts of a further increase in tariffs, for a while at least...," ING's Greater China economist Iris Pang said in a note.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.5% to a five-week top. Shanghai blue chips firmed 1.7% to a six-week peak.

Japan's Nikkei rose 1.6%, while Australia added 1% to its highest in 11 years. E-Mini futures for the S&amp;P 500 were a fraction firmer after an upbeat Wall Street session.

The Dow ended Tuesday with gains of 1.35%, while the S&amp;P 500 rose 0.97% and the Nasdaq 1.39%. The S&amp;P 500 has surged 6% so far this month to be 1% from the all-time high hit in early May.

All eyes are now upon the Fed which is scheduled to release a statement at 1800 GMT on Wednesday, followed by a press conference by Chairman Jerome Powell shortly after.

Yet the heightened anticipation also creates risks the Fed might fail to meet investors' high expectations.

"Market expectations for a dovish shift are nearly universal, the only question seems to be the degree," said Blake Gwinn, head of front-end rates at NatWest Markets.

Futures are almost fully priced for a quarter-point easing in July and imply more than 60 basis points of cuts by Christmas.

"Markets will be looking for validation of this pricing," he added. "We think this represents a fairly high bar for the Fed to deliver a dovish surprise."

Sub-zero yields

BofA Merrill Lynch's latest fund manager survey spoke volumes about the sea change in sentiment.

Allocation to global equities dropped 32 points to a net 21% underweight, the lowest since March 2009, while the bond allocation hit the highest since September 2011.

Interest rate expectations collapsed, while concerns about a trade war soared to be the top risk for investors, ahead of monetary policy impotence, US politics and a slower China.

The shift was clear in bond markets where German yields hit record lows deep in negative territory, while Japanese yields sank to the lowest since August 2016 at -0.145%.

Yields on the US 10-year note reached the lowest since September 2017 at 2.016%, a world away from the 3.25% top touched in November last year.

The fallout in currencies was significantly less, in large part because it was hard for one to gain when all the major central banks were under pressure to ease.

The euro did pull back a bit after Draghi's comments, but at $1.1192 was still well within the recent trading range of $1.1106-$1.1347.

The dollar remained sidelined against the yen at 108.49, and a shade firmer on a basket of currencies at 97.657. The yuan picked up to 6.905 to the dollar on the trade news.

In commodity markets, the rate-cut buzz kept gold near 14-month highs at $1,344.20 per ounce.

Michael Hsueh, an analyst at Deutsche, noted the decisively dovish shift in central bank expectations was bullish for gold.

"This provides the desired backdrop - one in which investors are less likely to be concerned about the opportunity cost of holding a non-yielding asset, particularly versus the increasing stock of negative-yielding debt," he said.

Reflation trades helped steady oil prices, as did hopes for a thaw in Sino-US tensions.

Brent crude futures were off 6 cents at $62.06, while US crude firmed 3 cents to $53.93 a barrel.

Confidence among Asian companies in the second quarter fell to its lowest since the 2008-09 financial crisis, as the trade war disrupts global supply chains and shows little sign of easing soon, a Thomson Reuters/INSEAD survey found.

Asian shares hit five-week highs on Wednesday as investors hoped the Federal Reserve would follow the lead of the European Central Bank and open the door to future rate cuts at its policy meeting later in the day.

Asian shares hit five-week highs on Wednesday as investors hoped the Federal Reserve would follow the lead of the European Central Bank and open the door to future rate cuts at its policy meeting later in the day. Indeed, ECB President Mario Draghi's shock about-face on easing fuelled talk of a worldwide wave of central bank stimulus, firing up stocks, bonds and commodities. Adding to the cheer was news US President Donald Trump would meet with Chinese President Xi Jinping at the G20 summit later this month, and that trade talks would restart after a recent lull. But most analysts do not expect a decisive breakthrough. "We expect no real change following the G20 sideline meeting. (But) the fact that both sides are talking should at least postpone thoughts of a further increase in tariffs, for a while at least...," ING's Greater China economist Iris Pang said in a note. MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.5% to a five-week top. Shanghai blue chips firmed 1.7% to a six-week peak. Japan's Nikkei rose 1.6%, while Australia added 1% to its highest in 11 years. E-Mini futures for the S&P 500 were a fraction firmer after an upbeat Wall Street session. The Dow ended Tuesday with gains of 1.35%, while the S&P 500 rose 0.97% and the Nasdaq 1.39%. The S&P 500 has surged 6% so far this month to be 1% from the all-time high hit in early May. All eyes are now upon the Fed which is scheduled to release a statement at 1800 GMT on Wednesday, followed by a press conference by Chairman Jerome Powell shortly after. Yet the heightened anticipation also creates risks the Fed might fail to meet investors' high expectations. "Market expectations for a dovish shift are nearly universal, the only question seems to be the degree," said Blake Gwinn, head of front-end rates at NatWest Markets. Futures are almost fully priced for a quarter-point easing in July and imply more than 60 basis points of cuts by Christmas. "Markets will be looking for validation of this pricing," he added. "We think this represents a fairly high bar for the Fed to deliver a dovish surprise." Sub-zero yields BofA Merrill Lynch's latest fund manager survey spoke volumes about the sea change in sentiment. Allocation to global equities dropped 32 points to a net 21% underweight, the lowest since March 2009, while the bond allocation hit the highest since September 2011. Interest rate expectations collapsed, while concerns about a trade war soared to be the top risk for investors, ahead of monetary policy impotence, US politics and a slower China. The shift was clear in bond markets where German yields hit record lows deep in negative territory, while Japanese yields sank to the lowest since August 2016 at -0.145%. Yields on the US 10-year note reached the lowest since September 2017 at 2.016%, a world away from the 3.25% top touched in November last year. The fallout in currencies was significantly less, in large part because it was hard for one to gain when all the major central banks were under pressure to ease. The euro did pull back a bit after Draghi's comments, but at $1.1192 was still well within the recent trading range of $1.1106-$1.1347. The dollar remained sidelined against the yen at 108.49, and a shade firmer on a basket of currencies at 97.657. The yuan picked up to 6.905 to the dollar on the trade news. In commodity markets, the rate-cut buzz kept gold near 14-month highs at $1,344.20 per ounce. Michael Hsueh, an analyst at Deutsche, noted the decisively dovish shift in central bank expectations was bullish for gold. "This provides the desired backdrop - one in which investors are less likely to be concerned about the opportunity cost of holding a non-yielding asset, particularly versus the increasing stock of negative-yielding debt," he said. Reflation trades helped steady oil prices, as did hopes for a thaw in Sino-US tensions. Brent crude futures were off 6 cents at $62.06, while US crude firmed 3 cents to $53.93 a barrel. Confidence among Asian companies in the second quarter fell to its lowest since the 2008-09 financial crisis, as the trade war disrupts global supply chains and shows little sign of easing soon, a Thomson Reuters/INSEAD survey found.

Asian shares climb, wager all on dovish Fed, trade hopes revive

Global stocks rallied on Tuesday and benchmark government bond yields tumbled after <a href="https://www.wionews.com/world/european-central-bank-will-ease-policy-if-inflation-doesnt-pick-up-draghi-228287">European Central Bank President Mario Draghi</a> hinted at economic stimulus, with equities getting an extra boost from confirmation that <a href="https://www.wionews.com/world/us-china-rekindle-trade-talks-ahead-of-donald-trump-xi-jinping-g20-meeting-228545">US President Donald Trump</a> would meet China's president to talk about trade.

The euro also weakened after Draghi said the ECB will ease policy again if inflation fails to accelerate, signalling one of the biggest policy reversals of his eight-year tenure.

Draghi's comments spurred talk that the Federal Reserve would also soon start easing monetary policy by cutting interest rates, with the US central bank set to give its policy statement on Wednesday.

"In the US, it got translated into, 'Oh great, this means the Fed will have to cut,'" said Carol Schleif, deputy chief investment officer with Abbot Downing in Minneapolis. "But we don’t necessarily think they have to or should this soon."

The Fed is expected to leave borrowing costs unchanged at its meeting this week but possibly lay the groundwork for a rate cut later this year.

<a href="https://www.wionews.com/world/trump-to-meet-chinas-top-trade-negotiator-as-deadline-presses-199044">Trump</a> has sought to influence the Fed to cut rates. In response to Draghi's comments, Trump on Tuesday accused the ECB president of trying to weaken the euro to gain an unfair competitive advantage.

Trump also said he would have an extended meeting with Chinese President Xi Jinping at the G20 summit later this month, as the world's two largest economies rekindle trade talks. China, which previously declined to say whether the two leaders would meet, confirmed the get-together.

"There had been some question in markets in the last few days about whether or not that meeting was going to happen," Schleif said. "It remains to be seen what comes out of that meeting."

MSCI's gauge of stocks across the globe gained 1.04%.

On Wall Street, the Dow Jones Industrial Average rose 353.01 points, or 1.35%, to 26,465.54, the S&amp;P 500 gained 28.08 points, or 0.97%, to 2,917.75 and the Nasdaq Composite added 108.86 points, or 1.39%, to 7,953.88.

The pan-European STOXX 600 index rose 1.67%, its best day since January.

Benchmark bond yields fell globally following Draghi's hints of more stimulus, with German bond yields hitting record lows deep in negative territory, around -0.32%, and French 10-year yields turning negative for the first time.

Benchmark US 10-year notes last rose 8/32 in price to yield 2.0578%, from 2.086% late on Monday.

"Draghi was extremely dovish and this had a big impact on Treasuries as we anticipate the Federal Reserve," said Ellis Phifer, market strategist at Raymond James in Memphis, Tennessee.

The dollar index, which measures the greenback against a basket of currencies, rose 0.06%, with the euro down 0.18% to $1.1197.

Oil prices rose sharply after Trump confirmed his meeting with Xi.

US crude settled up 3.8% at $53.90 a barrel, while Brent settled at $62.14 a barrel, up 2%.

Global stocks rallied on Tuesday and benchmark government bond yields tumbled after European Central Bank President Mario Draghi hinted at economic stimulus, with equities getting an extra boost from confirmation that US President Donald Trump would meet China's president to talk about trade.

Global stocks rallied on Tuesday and benchmark government bond yields tumbled after European Central Bank President Mario Draghi hinted at economic stimulus, with equities getting an extra boost from confirmation that US President Donald Trump would meet China's president to talk about trade. The euro also weakened after Draghi said the ECB will ease policy again if inflation fails to accelerate, signalling one of the biggest policy reversals of his eight-year tenure. Draghi's comments spurred talk that the Federal Reserve would also soon start easing monetary policy by cutting interest rates, with the US central bank set to give its policy statement on Wednesday. "In the US, it got translated into, 'Oh great, this means the Fed will have to cut,'" said Carol Schleif, deputy chief investment officer with Abbot Downing in Minneapolis. "But we don’t necessarily think they have to or should this soon." The Fed is expected to leave borrowing costs unchanged at its meeting this week but possibly lay the groundwork for a rate cut later this year. Trump has sought to influence the Fed to cut rates. In response to Draghi's comments, Trump on Tuesday accused the ECB president of trying to weaken the euro to gain an unfair competitive advantage. Trump also said he would have an extended meeting with Chinese President Xi Jinping at the G20 summit later this month, as the world's two largest economies rekindle trade talks. China, which previously declined to say whether the two leaders would meet, confirmed the get-together. "There had been some question in markets in the last few days about whether or not that meeting was going to happen," Schleif said. "It remains to be seen what comes out of that meeting." MSCI's gauge of stocks across the globe gained 1.04%. On Wall Street, the Dow Jones Industrial Average rose 353.01 points, or 1.35%, to 26,465.54, the S&P 500 gained 28.08 points, or 0.97%, to 2,917.75 and the Nasdaq Composite added 108.86 points, or 1.39%, to 7,953.88. The pan-European STOXX 600 index rose 1.67%, its best day since January. Benchmark bond yields fell globally following Draghi's hints of more stimulus, with German bond yields hitting record lows deep in negative territory, around -0.32%, and French 10-year yields turning negative for the first time. Benchmark US 10-year notes last rose 8/32 in price to yield 2.0578%, from 2.086% late on Monday. "Draghi was extremely dovish and this had a big impact on Treasuries as we anticipate the Federal Reserve," said Ellis Phifer, market strategist at Raymond James in Memphis, Tennessee. The dollar index, which measures the greenback against a basket of currencies, rose 0.06%, with the euro down 0.18% to $1.1197. Oil prices rose sharply after Trump confirmed his meeting with Xi. US crude settled up 3.8% at $53.90 a barrel, while Brent settled at $62.14 a barrel, up 2%.

Stocks lifted by hopes for monetary policy, US-China trade

European Central Bank chief Mario Draghi said Tuesday that the institution "doesn't target the exchange rate", shrugging off an allegation of currency manipulation from US President Donald Trump.

"We have our remit. We have our mandate. Our mandate is price stability" or inflation just below two per cent, Draghi told a central banking conference in Sintra, Portugal.

"We are ready to use all the instruments that are ready to fulfil this mandate, and we don't target the exchange rate," he added.

Draghi's statement that <a href="https://www.wionews.com/world/european-central-bank-will-ease-policy-if-inflation-doesnt-pick-up-draghi-228287">weak economic growth and sluggish inflation</a> could prompt the ECB to slash further rates already at historic lows had earlier sparked Trump's ire.

"Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA," Trump said via Twitter.

"They have been getting away with this for years, along with China and others," he added.

Draghi said in a speech that "further cuts in policy interest rates... remain part of our tools" as the bank looks to juice growth and inflation.

Eurozone policymakers had already discussed potential rate cuts in early June, but Draghi's Tuesday remarks were the first to catch markets' full attention.

That was in part because he said the central bank was ready to move "in the absence of improvement" rather than if economic conditions worsen, lowering the threshold for action.

Germany's DAX index of blue-chip shares leapt into the black from negative territory -- adding 2.1 per cent around 5:15 pm (1515 GMT) -- and pushed the euro down as much as 0.3 per cent against the dollar, to $1.12, before rebounding slightly.

"German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!" Trump tweeted.

Many of the DAX companies like carmaker BMW or chemical company Bayer, in fact, have a massive US presence.

And 10-year government bond yields in France briefly dipped into negative territory for the first time ever -- joining Germany, the Netherlands and Austria in the club of countries investors pay to lend them money -- before ticking up to 0.01 per cent mid-afternoon.

Draghi's speech was "the clearest indication yet that the bank will cut interest rates and relaunch its asset purchase programme in the coming months if... measures of inflation and inflation expectations remain very low," said Andrew Kenningham of Capital Economics.

From the start of his presidency in 2017, Trump accused trading partners like China and eurozone heavyweight Germany of currency manipulation.

Both countries and others like Japan and South Korea remain on a Washington watchlist, the US Treasury Department said last month, but have not been formally singled out as manipulators.

Action in the air

The ECB blames weakening economic growth on US-led trade conflicts, the looming threat of a no-deal Brexit and slower performance from emerging economies.

With the slower expansion, price growth was well short of the ECB goal of just below two per cent in May, at 1.2 per cent.

"In the absence of improvement, such that the sustained return of inflation to our aim is threatened, the additional stimulus will be required," Draghi said.

Aside from rate cuts, the ECB could restart its 2.6 trillion euro ($2.9 trillion) "quantitative easing" (QE) purchases of government and corporate debt.

For now, the Frankfurt-based central bank is on hold after promising no rate rises until at least mid-2020, while the US Federal Reserve is also making hints towards its first rate cut in more than a decade as confidence ebbs from the economy.

Virgin territory

Any new lowering of rates in the eurozone would be a step further into the unknown for the ECB, which has since 2014 charged banks to park cash with it, using a negative deposit rate now at -0.4 per cent.

"We think the bank will cut its deposit rate from -0.4 to -0.5 per cent in December," Capital Economics' Kenningham predicted.

Meanwhile, any restart of QE might require loosening some of the ECB's self-imposed rules on the scheme, designed to fend off allegations it is financing government spending by printing money.

Nevertheless, "the asset purchase programme still has considerable headroom," Draghi said.

European Central Bank chief Mario Draghi said Tuesday that the institution "doesn't target the exchange rate", shrugging off an allegation of currency manipulation from US President Donald Trump.

European Central Bank chief Mario Draghi said Tuesday that the institution "doesn't target the exchange rate", shrugging off an allegation of currency manipulation from US President Donald Trump. "We have our remit. We have our mandate. Our mandate is price stability" or inflation just below two per cent, Draghi told a central banking conference in Sintra, Portugal. "We are ready to use all the instruments that are ready to fulfil this mandate, and we don't target the exchange rate," he added. Draghi's statement that weak economic growth and sluggish inflation could prompt the ECB to slash further rates already at historic lows had earlier sparked Trump's ire. "Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA," Trump said via Twitter. "They have been getting away with this for years, along with China and others," he added. Draghi said in a speech that "further cuts in policy interest rates... remain part of our tools" as the bank looks to juice growth and inflation. Eurozone policymakers had already discussed potential rate cuts in early June, but Draghi's Tuesday remarks were the first to catch markets' full attention. That was in part because he said the central bank was ready to move "in the absence of improvement" rather than if economic conditions worsen, lowering the threshold for action. Germany's DAX index of blue-chip shares leapt into the black from negative territory -- adding 2.1 per cent around 5:15 pm (1515 GMT) -- and pushed the euro down as much as 0.3 per cent against the dollar, to $1.12, before rebounding slightly. "German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!" Trump tweeted. Many of the DAX companies like carmaker BMW or chemical company Bayer, in fact, have a massive US presence. And 10-year government bond yields in France briefly dipped into negative territory for the first time ever -- joining Germany, the Netherlands and Austria in the club of countries investors pay to lend them money -- before ticking up to 0.01 per cent mid-afternoon. Draghi's speech was "the clearest indication yet that the bank will cut interest rates and relaunch its asset purchase programme in the coming months if... measures of inflation and inflation expectations remain very low," said Andrew Kenningham of Capital Economics. From the start of his presidency in 2017, Trump accused trading partners like China and eurozone heavyweight Germany of currency manipulation. Both countries and others like Japan and South Korea remain on a Washington watchlist, the US Treasury Department said last month, but have not been formally singled out as manipulators. Action in the air The ECB blames weakening economic growth on US-led trade conflicts, the looming threat of a no-deal Brexit and slower performance from emerging economies. With the slower expansion, price growth was well short of the ECB goal of just below two per cent in May, at 1.2 per cent. "In the absence of improvement, such that the sustained return of inflation to our aim is threatened, the additional stimulus will be required," Draghi said. Aside from rate cuts, the ECB could restart its 2.6 trillion euro ($2.9 trillion) "quantitative easing" (QE) purchases of government and corporate debt. For now, the Frankfurt-based central bank is on hold after promising no rate rises until at least mid-2020, while the US Federal Reserve is also making hints towards its first rate cut in more than a decade as confidence ebbs from the economy. Virgin territory Any new lowering of rates in the eurozone would be a step further into the unknown for the ECB, which has since 2014 charged banks to park cash with it, using a negative deposit rate now at -0.4 per cent. "We think the bank will cut its deposit rate from -0.4 to -0.5 per cent in December," Capital Economics' Kenningham predicted. Meanwhile, any restart of QE might require loosening some of the ECB's self-imposed rules on the scheme, designed to fend off allegations it is financing government spending by printing money. Nevertheless, "the asset purchase programme still has considerable headroom," Draghi said.

European Central Bank chief Draghi brushes off Donald Trump's charge of currency manipulation

The <a href="https://www.wionews.com/business-economy/bond-yields-spiral-lower-take-stocks-along-for-the-ride-206161">European Central Bank </a>will ease policy again if inflation does not rise back to its target, ECB President <a href="https://www.wionews.com/business-economy/asia-stocks-firm-euro-sags-after-dovish-ecb-192609">Mario Draghi</a> said on Tuesday, reinforcing expectations for even more stimulus in the coming weeks.

The ECB has undershot its inflation target of just under 2 per cent since 2013 and a slowdown in growth amid a global trade war has raised the risk that price growth will ease further, unravelling the impact of unprecedented accommodation.

"In the absence of improvement, such that the sustained return of inflation to our aim is threatened, the additional stimulus will be required," Draghi told the ECB's annual conference in Sintra, Portugal.

He said the ECB could still cut rates, adjust its guidance, offer mitigating measures to counter the unwanted side effects of negative rates and it also had "considerable headroom" for more asset purchases.

The comments, taken by markets as unexpectedly dovish, sent the euro down by a quarter of a per cent against the dollar while stocks erased early losses and bond yields fell further, many into record low territory.

Markets have already priced in 15-20 basis points of cuts in the ECB's minus 0.40% deposit rate - a big change compared to the start of the year when rate hikes were firmly on the table.

"Will use all the flexibility within our mandate to fulfil our mandate – and we will do so again to answer any challenges to price stability in the future," Draghi said.

Adding an argument for the urgency of action, Draghi noted that growth risks are tilted to the downside and indicators for the coming quarters point to lingering softness.

The ECB would now use the "coming weeks" to study its options, a suggestion that indicated action from the bank may come sooner rather than later.

Limits

Draghi also dismissed market concerns that asset purchases lacked potency as the ECB was coming up against its self-imposed limits, including a rule that prevents it from buying more than one-third of a particular country's debt.

He noted that the limits are flexible because the ECB's legal powers allow it to deploy tools that are both necessary and proportionate.

He said the European Court of Justice had already confirmed that the ECB has broad discretion in using its tools.

Although the ECJ cleared the asset purchases in an earlier ruling, it argued that limits on the buys must be in place, suggesting that any change in those limits could land the ECB back in court.

The ECB sees inflation at 1.4% next year and market-based inflation expectations point to a slowdown in the years ahead.

But Draghi said the ECB would not accept low inflation and would fulfil its mandate, even if the fiscal policy did not provide the necessary support.

"We are committed, and are not resigned to having a low rate of inflation forever or even for now," Draghi said. "That aim is symmetric, which means that, if we are to deliver that value of inflation in the medium term, inflation has to be above that level at some time in the future."

The European Central Bank will ease policy again if inflation does not rise back to its target, ECB President Mario Draghi said on Tuesday, reinforcing expectations for even more stimulus in the coming weeks.

The European Central Bank will ease policy again if inflation does not rise back to its target, ECB President Mario Draghi said on Tuesday, reinforcing expectations for even more stimulus in the coming weeks. The ECB has undershot its inflation target of just under 2 per cent since 2013 and a slowdown in growth amid a global trade war has raised the risk that price growth will ease further, unravelling the impact of unprecedented accommodation. "In the absence of improvement, such that the sustained return of inflation to our aim is threatened, the additional stimulus will be required," Draghi told the ECB's annual conference in Sintra, Portugal. He said the ECB could still cut rates, adjust its guidance, offer mitigating measures to counter the unwanted side effects of negative rates and it also had "considerable headroom" for more asset purchases. The comments, taken by markets as unexpectedly dovish, sent the euro down by a quarter of a per cent against the dollar while stocks erased early losses and bond yields fell further, many into record low territory. Markets have already priced in 15-20 basis points of cuts in the ECB's minus 0.40% deposit rate - a big change compared to the start of the year when rate hikes were firmly on the table. "Will use all the flexibility within our mandate to fulfil our mandate – and we will do so again to answer any challenges to price stability in the future," Draghi said. Adding an argument for the urgency of action, Draghi noted that growth risks are tilted to the downside and indicators for the coming quarters point to lingering softness. The ECB would now use the "coming weeks" to study its options, a suggestion that indicated action from the bank may come sooner rather than later. Limits Draghi also dismissed market concerns that asset purchases lacked potency as the ECB was coming up against its self-imposed limits, including a rule that prevents it from buying more than one-third of a particular country's debt. He noted that the limits are flexible because the ECB's legal powers allow it to deploy tools that are both necessary and proportionate. He said the European Court of Justice had already confirmed that the ECB has broad discretion in using its tools. Although the ECJ cleared the asset purchases in an earlier ruling, it argued that limits on the buys must be in place, suggesting that any change in those limits could land the ECB back in court. The ECB sees inflation at 1.4% next year and market-based inflation expectations point to a slowdown in the years ahead. But Draghi said the ECB would not accept low inflation and would fulfil its mandate, even if the fiscal policy did not provide the necessary support. "We are committed, and are not resigned to having a low rate of inflation forever or even for now," Draghi said. "That aim is symmetric, which means that, if we are to deliver that value of inflation in the medium term, inflation has to be above that level at some time in the future."

European Central Bank will ease policy if inflation doesn't pick up: Chief Draghi

Asian markets mostly fell Friday with investors treading carefully as global slowdown worries return to the fore, with analysts pointing to an economic divergence between the US and the rest of the world.

Traders have been cheered by a string of better-than-expected earnings from corporate titans this reporting season, with Facebook, Microsoft and Amazon adding to the positive mood on Wall Street, but were unable to fuel broad gains.

However, there have been a couple of misses from other top firms, while crucially a series of downbeat data and central bank caution have dampened spirits.

Central banks in Japan, Sweden, Turkey and Ukraine, with an eye on the global outlook, on Thursday, took a dovish turn and flagged softer policy in the near future. That came after a growth forecast cut by the Bank of Canada.

Meanwhile, low inflation has led to speculation the Reserve Bank of Australia could soon cut borrowing costs, while the European Central Bank is battling weak eurozone growth.

On top of that, a drop in German business confidence fanned worries about the bloc's biggest economy, while South Korea saw its worst performance in 10 years during the first quarter.

But while the Federal Reserve has said it will not likely raise interest rates this year the US economy continues to outpace its peers and the jobs markets are flourishing, with Wall Street hitting new records this week. Eyes are now on the release of US growth data later Friday.

"While positive earning numbers have lent massive support to US equities, it's hard to ignore the inescapable fact that we are back to the divergent economic narrative where the US economy is on fire while ice water continued to pour over the rest of the globe," said Stephen Innes of SPI Asset Management.

Shanghai dropped 0.5 per cent in the morning, extending losses of more than two per cent Thursday as investors fret that a run of market-supporting stimulus measures aimed at supporting the economy could be coming to an end.

Tokyo ended the morning down 0.7 per cent, Seoul shed 0.4 per cent and Singapore added 0.1 per cent.

There were also losses in Taipei, Wellington and Jakarta.

However, Hong Kong rose 0.3 per cent after suffering five straight days of decline.

The broad losses come at the end of a tough week for markets, which have enjoyed a blockbuster start to the year, thanks to hopes for China-US trade talks.

On oil markets both main contracts continued to fall after this week, hitting six-month highs as traders await the response from OPEC and Russia after the US said it would not extend waivers that allow certain countries to buy crude from sanctions-hit Iran.

Observers said that after the jump in prices, selling was to be expected owing to a number of factors including the China-US trade talks, unrest in Libya, Venezuela's political crisis and the OPEC-Russia output caps.

Asian markets mostly fell Friday with investors treading carefully as global slowdown worries return to the fore, with analysts pointing to an economic divergence between the US and the rest of the world.

Asian markets mostly fell Friday with investors treading carefully as global slowdown worries return to the fore, with analysts pointing to an economic divergence between the US and the rest of the world. Traders have been cheered by a string of better-than-expected earnings from corporate titans this reporting season, with Facebook, Microsoft and Amazon adding to the positive mood on Wall Street, but were unable to fuel broad gains. However, there have been a couple of misses from other top firms, while crucially a series of downbeat data and central bank caution have dampened spirits. Central banks in Japan, Sweden, Turkey and Ukraine, with an eye on the global outlook, on Thursday, took a dovish turn and flagged softer policy in the near future. That came after a growth forecast cut by the Bank of Canada. Meanwhile, low inflation has led to speculation the Reserve Bank of Australia could soon cut borrowing costs, while the European Central Bank is battling weak eurozone growth. On top of that, a drop in German business confidence fanned worries about the bloc's biggest economy, while South Korea saw its worst performance in 10 years during the first quarter. But while the Federal Reserve has said it will not likely raise interest rates this year the US economy continues to outpace its peers and the jobs markets are flourishing, with Wall Street hitting new records this week. Eyes are now on the release of US growth data later Friday. "While positive earning numbers have lent massive support to US equities, it's hard to ignore the inescapable fact that we are back to the divergent economic narrative where the US economy is on fire while ice water continued to pour over the rest of the globe," said Stephen Innes of SPI Asset Management. Shanghai dropped 0.5 per cent in the morning, extending losses of more than two per cent Thursday as investors fret that a run of market-supporting stimulus measures aimed at supporting the economy could be coming to an end. Tokyo ended the morning down 0.7 per cent, Seoul shed 0.4 per cent and Singapore added 0.1 per cent. There were also losses in Taipei, Wellington and Jakarta. However, Hong Kong rose 0.3 per cent after suffering five straight days of decline. The broad losses come at the end of a tough week for markets, which have enjoyed a blockbuster start to the year, thanks to hopes for China-US trade talks. On oil markets both main contracts continued to fall after this week, hitting six-month highs as traders await the response from OPEC and Russia after the US said it would not extend waivers that allow certain countries to buy crude from sanctions-hit Iran. Observers said that after the jump in prices, selling was to be expected owing to a number of factors including the China-US trade talks, unrest in Libya, Venezuela's political crisis and the OPEC-Russia output caps.

Asian markets mostly down after mixed lead from Wall Street

The eurozone is moving to stop printing 500-euro banknotes, the violet-coloured bills that authorities fear are favoured by criminals, with most of the 19 nations in the currency bloc to halt issuing them next month.&nbsp;

"As of 27 January 2019, 17 of the 19 national central banks in the euro area will no longer issue 500-euro banknotes," the European Central Bank said on its website.

However, Austria and Germany will both continue printing the banknotes until April 26 "in order to ensure a smooth transition and for logistical reasons", the ECB said.

The 500-euro notes in circulation remain legal tender and can be used to make payments.

The ECB announced in May 2016 that it would halt issuing new 500-euro notes, saying at the time that it expected to do so around the end of 2018, due to "concerns that this banknote could facilitate illicit activities".

The largest denomination banknote in the single currency area is one of the world's most valuable bills, alongside the 1,000 Swiss franc ($1,017, 888 euros) note.

Because of its high value and portability, experts believe the 500-euro note had become prized by criminals for money laundering and even terrorist financing, earning the nickname "Bin Laden" in some circles.

According to ECB statistics, 500-euro bills account for just 2.4 per cent of the total number of banknotes in circulation, but a little over 20 per cent of the total value. At the end of November, there were 521 million of the banknotes in circulation.&nbsp;

The 500-euro banknotes were actually last printed in 2014, with demand satisfied since from stocks.

The eurozone is moving to stop printing 500-euro banknotes, the violet-coloured bills that authorities fear are favoured by criminals, with most of the 19 nations in the currency bloc to halt issuing them next month.

The eurozone is moving to stop printing 500-euro banknotes, the violet-coloured bills that authorities fear are favoured by criminals, with most of the 19 nations in the currency bloc to halt issuing them next month. "As of 27 January 2019, 17 of the 19 national central banks in the euro area will no longer issue 500-euro banknotes," the European Central Bank said on its website. However, Austria and Germany will both continue printing the banknotes until April 26 "in order to ensure a smooth transition and for logistical reasons", the ECB said. The 500-euro notes in circulation remain legal tender and can be used to make payments. The ECB announced in May 2016 that it would halt issuing new 500-euro notes, saying at the time that it expected to do so around the end of 2018, due to "concerns that this banknote could facilitate illicit activities". The largest denomination banknote in the single currency area is one of the world's most valuable bills, alongside the 1,000 Swiss franc ($1,017, 888 euros) note. Because of its high value and portability, experts believe the 500-euro note had become prized by criminals for money laundering and even terrorist financing, earning the nickname "Bin Laden" in some circles. According to ECB statistics, 500-euro bills account for just 2.4 per cent of the total number of banknotes in circulation, but a little over 20 per cent of the total value. At the end of November, there were 521 million of the banknotes in circulation. The 500-euro banknotes were actually last printed in 2014, with demand satisfied since from stocks.

500-euro note gets last print run

Asian&nbsp;shares&nbsp;rose to a fresh 11-week high on Thursday, supported by sound economic fundamentals, while expectations the&nbsp;European Central Bank (ECB) may soon start to wind down its stimulus boosted the&nbsp;euro&nbsp;and&nbsp;global&nbsp;bond&nbsp;yields.

MSCI's broadest index of Asia-Pacific&nbsp;shares&nbsp;outside Japan advanced 0.5 per cent to extend its gains,&nbsp;hitting a 2-1/2-month high for a second straight day. Japan's Nikkei average rose 0.9 per cent.

Notable gainers included technology-heavy Taiwanese stocks, with Taiwan's main index nearing the 27-year high of 11,270&nbsp;hit&nbsp;on January 23. The index has rallied 4.25 per cent since last Wednesday, boosted by the rally in tech stocks and the Nasdaq.

India's broader NSE index rose to a three-week high, with private-sector lenders leading gains, a day&nbsp;after&nbsp;the central bank raised its policy rate for the first time in more than four years.

Spreadbetters expected the firmer tone in equities to carry over into&nbsp;Europe, forecasting a higher open for Britain's FTSE, Germany's DAX and France's CAC.

"Quite clearly, it was the&nbsp;euro's day," said Marshall Gittler, chief strategist at ACLS&nbsp;Global. "Aside from the&nbsp;euro, the main theme in the market was back to risk-on."

The&nbsp;euro&nbsp;held near a two-week high while the yield on Germany's benchmark 10-year bond&nbsp;hit&nbsp;its own two-week high of 0.486 per cent on growing conviction the&nbsp;European Central Bank would announce as early as next week its intention to end a drawn-out stimulus programme by year-end.

The 10-year US&nbsp;Treasury yield&nbsp;hit&nbsp;a fresh 1-1/2-week peak of 2.985 per cent.

ECB&nbsp;Chief Economist Peter Praet said on Wednesday that robust growth made the central bank increasingly confident that inflation is on its way back to target, raising the chances it may use next week's meeting next week to reveal more about the end of its bond-buying program.

Praet's&nbsp;comments&nbsp;sent the&nbsp;euro&nbsp;to $1.1796, its highest level since May 22, on Wednesday. The common currency last traded up 0.1 per cent at $1.1789. The dollar index was down 0.1 per cent to 93.525.

Worries over the effects of reduced&nbsp;ECB&nbsp;bond buying triggered a broad sell-off in German Bunds and other&nbsp;European government debt, which spilled over to Treasuries, analysts said.

Higher&nbsp;yields&nbsp;helped to lift S&P 500 financials, which rose 1.8 per cent and were the biggest percentage gainer among S&P 500 sectors.

"The US&nbsp;10 year Treasury yield rose alongside its&nbsp;eurozone peers overnight, while US&nbsp;stocks rallied, reflecting a risk-on attitude among investors," said Makoto Noji, senior FX/bond strategist at SMBC Nikko Securities.

White House economic adviser Larry Kudlow said late on Wednesday that US&nbsp;President Donald Trump would meet French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau at the G7 summit this week.

Although Kudlow said Trump would not back down from the tough line he has taken on trade, the comments&nbsp;appeared to calm investors.

The Dow Jones Industrial Average rose 1.4 per cent to 25,146.39, the S&P 500 gained 0.86 per cent to 2,772.35 and the Nasdaq Composite added 0.67 per cent to&nbsp;hit&nbsp;its record closing high of 7,689.24.

Oil prices rose on Thursday to shake off some of the previous session's losses, supported by plunging exports from OPEC-member Venezuela.

Brent crude futures last traded at $75.84 a barrel and US&nbsp;West Texas Intermediate (WTI) crude at 65.04, rising 0.6 per cent and 0.5 per cent on the day, respectively.

Copper&nbsp;hit&nbsp;a five-month high of $7,278.50 per tonne, though the gains were driven more by supply concerns in Chile than by stronger demand.

Market participants, wary of event risk, are monitoring developments ahead of the G7 summit later this week and the US-North Korea summit scheduled for next week.

India's broader NSE index rose to a three-week high, with private-sector lenders leading gains, a day after the central bank raised its policy rate for the first time in more than four years

Asian shares rose to a fresh 11-week high on Thursday, supported by sound economic fundamentals, while expectations the European Central Bank (ECB) may soon start to wind down its stimulus boosted the euro and global bond yields. MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5 per cent to extend its gains, hitting a 2-1/2-month high for a second straight day. Japan's Nikkei average rose 0.9 per cent. Notable gainers included technology-heavy Taiwanese stocks, with Taiwan's main index nearing the 27-year high of 11,270 hit on January 23. The index has rallied 4.25 per cent since last Wednesday, boosted by the rally in tech stocks and the Nasdaq. India's broader NSE index rose to a three-week high, with private-sector lenders leading gains, a day after the central bank raised its policy rate for the first time in more than four years. Spreadbetters expected the firmer tone in equities to carry over into Europe, forecasting a higher open for Britain's FTSE, Germany's DAX and France's CAC. "Quite clearly, it was the euro's day," said Marshall Gittler, chief strategist at ACLS Global. "Aside from the euro, the main theme in the market was back to risk-on." The euro held near a two-week high while the yield on Germany's benchmark 10-year bond hit its own two-week high of 0.486 per cent on growing conviction the European Central Bank would announce as early as next week its intention to end a drawn-out stimulus programme by year-end. The 10-year US Treasury yield hit a fresh 1-1/2-week peak of 2.985 per cent. ECB Chief Economist Peter Praet said on Wednesday that robust growth made the central bank increasingly confident that inflation is on its way back to target, raising the chances it may use next week's meeting next week to reveal more about the end of its bond-buying program. Praet's comments sent the euro to $1.1796, its highest level since May 22, on Wednesday. The common currency last traded up 0.1 per cent at $1.1789. The dollar index was down 0.1 per cent to 93.525. Worries over the effects of reduced ECB bond buying triggered a broad sell-off in German Bunds and other European government debt, which spilled over to Treasuries, analysts said. Higher yields helped to lift S&P 500 financials, which rose 1.8 per cent and were the biggest percentage gainer among S&P 500 sectors. "The US 10 year Treasury yield rose alongside its eurozone peers overnight, while US stocks rallied, reflecting a risk-on attitude among investors," said Makoto Noji, senior FX/bond strategist at SMBC Nikko Securities. White House economic adviser Larry Kudlow said late on Wednesday that US President Donald Trump would meet French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau at the G7 summit this week. Although Kudlow said Trump would not back down from the tough line he has taken on trade, the comments appeared to calm investors. The Dow Jones Industrial Average rose 1.4 per cent to 25,146.39, the S&P 500 gained 0.86 per cent to 2,772.35 and the Nasdaq Composite added 0.67 per cent to hit its record closing high of 7,689.24. Oil prices rose on Thursday to shake off some of the previous session's losses, supported by plunging exports from OPEC-member Venezuela. Brent crude futures last traded at $75.84 a barrel and US West Texas Intermediate (WTI) crude at 65.04, rising 0.6 per cent and 0.5 per cent on the day, respectively. Copper hit a five-month high of $7,278.50 per tonne, though the gains were driven more by supply concerns in Chile than by stronger demand. Market participants, wary of event risk, are monitoring developments ahead of the G7 summit later this week and the US-North Korea summit scheduled for next week.

Global Markets: Asian shares hit 11-week high; euro, yields rise after ECB comments

Gold prices eased on Friday on profit-taking, after breaking above $1,300 in the previous session when US&nbsp;President Donald Trump's decision to call off a meeting with North Korean leader Kim Jong Un triggered safe-haven buying.

Spot gold was down 0.2 per cent at $1,302.18 per ounce at 0312 GMT, after gaining nearly 1 per cent in the previous session in its biggest one-day percentage rise since April 11. It remains on track for a weekly advance.

US&nbsp;gold futures for June delivery fell 0.2 per cent to $1,301.80 per ounce.

"It is normal for some profit-taking to ensue after a surge (in prices). Still, gold appears to be anchored in the $1,300-range, especially with the recent uptick in geopolitical tensions," said OCBC analyst Barnabas Gan.

"The sustained uncertainty over (US-North Korea) negotiations will likely add further upside to gold prices given safe-haven demand," Gan said.

Gold is often seen as a safe investment during times of political and financial uncertainty, alongside the Japanese yen.

The dollar regained its footing on Friday after dropping to a 2-week low versus the yen in the previous session, as North Korea said it was open to resolving issues with the United States after Trump on Thursday called off a summit with the North, citing Pyongyang's "open hostility".

A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies.

The North's conciliatory remarks and commitment to US-North Korea talks had eased some concern about the crisis and pressured gold, said Helen Lau, an analyst at Argonaut Securities.

Meanwhile, Trump's threat to impose tariffs on auto imports drew strong criticism abroad and at home where US&nbsp;business&nbsp;groups and members of his own Republican Party warned of damage to the industry and raised the prospect of a global trade war that would harm American interests.

Elsewhere, eurozone growth could slow further and uncertainty is on the rise but the bloc's expansion remains solid and broad-based, European Central Bank policymakers concluded in April, the minutes of the meeting showed on Thursday.

Among other precious metals, silver fell 0.3 per cent to $16.57 an ounce, while platinum edged down 0.1 per cent to $908.50 an ounce after touching its highest since May 14 at $914.30 in the previous session.

Palladium climbed about 0.2 per cent to $976.10 an ounce.

All three of those metals were on course for weekly gains.

Spot gold was down 0.2 per cent at $1,302.18 per ounce at 0312 GMT, after gaining nearly 1 percent in the previous session

Gold prices eased on Friday on profit-taking, after breaking above $1,300 in the previous session when US President Donald Trump's decision to call off a meeting with North Korean leader Kim Jong Un triggered safe-haven buying. Spot gold was down 0.2 per cent at $1,302.18 per ounce at 0312 GMT, after gaining nearly 1 per cent in the previous session in its biggest one-day percentage rise since April 11. It remains on track for a weekly advance. US gold futures for June delivery fell 0.2 per cent to $1,301.80 per ounce. "It is normal for some profit-taking to ensue after a surge (in prices). Still, gold appears to be anchored in the $1,300-range, especially with the recent uptick in geopolitical tensions," said OCBC analyst Barnabas Gan. "The sustained uncertainty over (US-North Korea) negotiations will likely add further upside to gold prices given safe-haven demand," Gan said. Gold is often seen as a safe investment during times of political and financial uncertainty, alongside the Japanese yen. The dollar regained its footing on Friday after dropping to a 2-week low versus the yen in the previous session, as North Korea said it was open to resolving issues with the United States after Trump on Thursday called off a summit with the North, citing Pyongyang's "open hostility". A stronger dollar makes dollar-denominated gold more expensive for holders of other currencies. The North's conciliatory remarks and commitment to US-North Korea talks had eased some concern about the crisis and pressured gold, said Helen Lau, an analyst at Argonaut Securities. Meanwhile, Trump's threat to impose tariffs on auto imports drew strong criticism abroad and at home where US business groups and members of his own Republican Party warned of damage to the industry and raised the prospect of a global trade war that would harm American interests. Elsewhere, eurozone growth could slow further and uncertainty is on the rise but the bloc's expansion remains solid and broad-based, European Central Bank policymakers concluded in April, the minutes of the meeting showed on Thursday. Among other precious metals, silver fell 0.3 per cent to $16.57 an ounce, while platinum edged down 0.1 per cent to $908.50 an ounce after touching its highest since May 14 at $914.30 in the previous session. Palladium climbed about 0.2 per cent to $976.10 an ounce. All three of those metals were on course for weekly gains.

Gold slips, but demand keeps prices above $1,300

World stocks rose on Friday, lifted by strong share price gains for tech giants such as Amazon and Facebook and growing hopes of a lasting peace on the Korean peninsula after a ground-breaking meeting of North and South Korean leaders.

European shares were set to end the week with a flourish too with a pan-European index set to post its fifth week of gains in a row, with the tech sector outperforming.

The latest gains are being partly spurred by forecast-beating first-quarter earnings from two of the so-called FANG tech stocks -- some of the world's largest and most influential companies by market capitalisation -- which has boosted sentiment on the technology sector worldwide.

Still, US&nbspstock futures pointed to a weaker open for Wall Street after Thursday's earnings-driven rally.

Amazon.com Inc shares jumped more than 6 per cent in after-market trading while Facebook surged 9.1 per cent on Thursday, calming worries about the fallout from its use of consumer data.

"Macroeconomic data has been soft in a number of key economies, so it is reassuring that amidst those concerns we are still seeing strong earnings numbers coming through from big ticket corporates such as Amazon and Facebook," said Investec economist Victoria Clarke.

"This is a good gauge of the broad drivers of sentiment particularly when there are those concerns about demand holding up in the face of weak economic data," Clarke added.

European tech shares rose 1 per cent to the highest in more than five weeks, buoyed also by gains in local IT and chipmaking firms such as Capgemini, ASML and Infineon.

Sterling slides

Sterling slumped to its lowest since March 9 against the dollar after data showed Britain's economy slowed much more sharply than expected in the first quarter of 2018, slashing market expectations of a Bank of England rate hike in May.

The currency was last down 1 per cent at $1.3770. It also fell 1 per cent against the euro to 87.85 pence and was on track for its worst day since November.

"A May rate hike is off the table now this pushes the hike back to August at the earliest and more likely November," said Jake Trask, a currencies analyst at OFX.

However, sterling's slide helped shares on Britain's FTSE index to rise 0.7 per cent with gains led by multi-national earners which earn a big chunk of their revenues overseas but report profits in pounds.

The weak data adds to concerns that economic growth across the developed world is running out of steam, especially after lacklustre euro zone figures earlier in the week and data on Friday showing French economic growth slowed more than expected in the first quarter.

The European Central Bank on Thursday played down concerns over softness in the euro zone economy as it sought to bolster expectations for a gradual withdrawal of monetary stimulus.

On Friday, Japan's central bank kept policy unchanged but ditched a time frame it had set for hitting its inflation target, in a surprise move analysts say is aimed at keeping market expectations for more stimulus in check.

"Within a 12 hour period it seems like the expectations are three key central banks will delay any tightening of monetary policy from what was previously expected... Equity markets should be comforted by that," said Bob Michele, CIO and head of global fixed income, currency and commodities at JPMorgan Asset Management.

Historic moment for Korea

South Korea's won led a rebound in emerging market currencies as comments from North Korea's Kim Jong Un of a "new history" between the two sides helped end a brutal week for emerging market currencies on a positive note.

North and South Korea agreed on Friday to pursue the "complete denuclearisation of the Korean peninsula" and work towards declaring an official end this year to the 1950s Korean war.

The won rose as much as 0.6 per cent against the dollar, while Asian stock markets also revelled in the glow of the summit between North and South Korea.

Seoul shares briefly rise more than 1 per cent to a one-month high, while MSCI's index of Asian shares outside Japan rallied 0.8 per cent and Japan's Nikkei share average rose 0.7 percent to two-month peaks.

The dollar meanwhile hit its highest since Jan. 12 against a basket of currencies, having benefited from the recent run in US&nbspTreasury yields -- 10-year yields hit 3 per cent this week for the first time since January 2014.

With a weekly gain of more than 1.5 per cent, the greenback is set for its best weekly performance since late 2016.

European shares were set to end the week with a flourish too with a pan-European index set to post its fifth week of gains in a row, with the tech sector outperforming

World stocks rose on Friday, lifted by strong share price gains for tech giants such as Amazon and Facebook and growing hopes of a lasting peace on the Korean peninsula after a ground-breaking meeting of North and South Korean leaders. European shares were set to end the week with a flourish too with a pan-European index set to post its fifth week of gains in a row, with the tech sector outperforming. The latest gains are being partly spurred by forecast-beating first-quarter earnings from two of the so-called FANG tech stocks -- some of the world's largest and most influential companies by market capitalisation -- which has boosted sentiment on the technology sector worldwide. Still, US&nbspstock futures pointed to a weaker open for Wall Street after Thursday's earnings-driven rally. Amazon.com Inc shares jumped more than 6 per cent in after-market trading while Facebook surged 9.1 per cent on Thursday, calming worries about the fallout from its use of consumer data. "Macroeconomic data has been soft in a number of key economies, so it is reassuring that amidst those concerns we are still seeing strong earnings numbers coming through from big ticket corporates such as Amazon and Facebook," said Investec economist Victoria Clarke. "This is a good gauge of the broad drivers of sentiment particularly when there are those concerns about demand holding up in the face of weak economic data," Clarke added. European tech shares rose 1 per cent to the highest in more than five weeks, buoyed also by gains in local IT and chipmaking firms such as Capgemini, ASML and Infineon. Sterling slides Sterling slumped to its lowest since March 9 against the dollar after data showed Britain's economy slowed much more sharply than expected in the first quarter of 2018, slashing market expectations of a Bank of England rate hike in May. The currency was last down 1 per cent at $1.3770. It also fell 1 per cent against the euro to 87.85 pence and was on track for its worst day since November. "A May rate hike is off the table now this pushes the hike back to August at the earliest and more likely November," said Jake Trask, a currencies analyst at OFX. However, sterling's slide helped shares on Britain's FTSE index to rise 0.7 per cent with gains led by multi-national earners which earn a big chunk of their revenues overseas but report profits in pounds. The weak data adds to concerns that economic growth across the developed world is running out of steam, especially after lacklustre euro zone figures earlier in the week and data on Friday showing French economic growth slowed more than expected in the first quarter. The European Central Bank on Thursday played down concerns over softness in the euro zone economy as it sought to bolster expectations for a gradual withdrawal of monetary stimulus. On Friday, Japan's central bank kept policy unchanged but ditched a time frame it had set for hitting its inflation target, in a surprise move analysts say is aimed at keeping market expectations for more stimulus in check. "Within a 12 hour period it seems like the expectations are three key central banks will delay any tightening of monetary policy from what was previously expected... Equity markets should be comforted by that," said Bob Michele, CIO and head of global fixed income, currency and commodities at JPMorgan Asset Management. Historic moment for Korea South Korea's won led a rebound in emerging market currencies as comments from North Korea's Kim Jong Un of a "new history" between the two sides helped end a brutal week for emerging market currencies on a positive note. North and South Korea agreed on Friday to pursue the "complete denuclearisation of the Korean peninsula" and work towards declaring an official end this year to the 1950s Korean war. The won rose as much as 0.6 per cent against the dollar, while Asian stock markets also revelled in the glow of the summit between North and South Korea. Seoul shares briefly rise more than 1 per cent to a one-month high, while MSCI's index of Asian shares outside Japan rallied 0.8 per cent and Japan's Nikkei share average rose 0.7 percent to two-month peaks. The dollar meanwhile hit its highest since Jan. 12 against a basket of currencies, having benefited from the recent run in US&nbspTreasury yields -- 10-year yields hit 3 per cent this week for the first time since January 2014. With a weekly gain of more than 1.5 per cent, the greenback is set for its best weekly performance since late 2016.

Tech gains, Korean talks lift world stock markets; sterling tumbles 

Euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high.

The bloc&#39;s economy outpaced its peers last year, and the European Central Bank plans to scale back its stimulus programme from this month.

IHS Markit&#39;s December final manufacturing Purchasing Managers&#39; Index for the bloc was 60.6, matching an earlier preliminary reading and above November&#39;s 60.1. That was the highest since the survey began in June 1997.

An index measuring output, which feeds into a composite PMI due on Thursday and seen as a good guide to economic health, rose to 62.2 from November&#39;s 61.0 - its highest in over 17 years and has only been above that once in the survey&#39;s history.

&quot;The euro zone manufacturing boom gained further momentum in December, rounding off the best year on record and setting the scene for a strong start to 2018,&quot; said Chris Williamson, chief business economist at IHS Markit.

&quot;Forward-looking indicators bode well for the new year: new orders rose at a near-record pace while purchasing growth hit a new peak as firms readied themselves for higher production. Meanwhile, job creation was maintained at November&#39;s record pace.&quot;

Despite factories raising prices again last month, albeit, at a slightly weaker rate than in November, an index measuring new orders nudged up to 61.5 from 61.4, a level not seen since around the start of the century.

Inflation was 1.5 per cent in November, below the ECB&#39;s 2 per cent target ceiling, but the central bank announced in October it will halve its monthly asset purchases to 30 billion euros from January.

A majority of economists in a Reuters poll last year said they thought the ECB should shut the door on the programme in September, but they were split on whether it actually would.

Eurozone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high

Euro zone manufacturers ended 2017 by ramping up activity at the fastest pace in more than two decades, a survey showed on Tuesday, and rising demand suggests they will start the new year on a high. The bloc's economy outpaced its peers last year, and the European Central Bank plans to scale back its stimulus programme from this month. IHS Markit's December final manufacturing Purchasing Managers' Index for the bloc was 60.6, matching an earlier preliminary reading and above November's 60.1. That was the highest since the survey began in June 1997. An index measuring output, which feeds into a composite PMI due on Thursday and seen as a good guide to economic health, rose to 62.2 from November's 61.0 - its highest in over 17 years and has only been above that once in the survey's history. "The euro zone manufacturing boom gained further momentum in December, rounding off the best year on record and setting the scene for a strong start to 2018," said Chris Williamson, chief business economist at IHS Markit. "Forward-looking indicators bode well for the new year: new orders rose at a near-record pace while purchasing growth hit a new peak as firms readied themselves for higher production. Meanwhile, job creation was maintained at November's record pace." Despite factories raising prices again last month, albeit, at a slightly weaker rate than in November, an index measuring new orders nudged up to 61.5 from 61.4, a level not seen since around the start of the century. Inflation was 1.5 per cent in November, below the ECB's 2 per cent target ceiling, but the central bank announced in October it will halve its monthly asset purchases to 30 billion euros from January. A majority of economists in a Reuters poll last year said they thought the ECB should shut the door on the programme in September, but they were split on whether it actually would.

Euro zone factories ended 2017 with record high growth: PMI

Badly conceived and economically wrong, the euro is at the heart of most of the eurozone&#39;s problems such as stagnation, unemployment and the rise of the far-right, Nobel-prize-winning economist Joseph Stiglitz told AFP on Wednesday.&nbsp; 
 
The outspoken economist said the single currency was structurally flawed from the outset and takes away member states&#39; ability to make crucial adjustments to their economies. 
 
&quot;What they did was to put the cart before the horse. They tried to create the euro before they had the institutions,&quot; said the former World Bank chief economist, 73. 
 
While the euro might be a boon for &quot;a few people and the bankers who can move money more easily around,&quot; it&#39;s less positive for ordinary individuals in the eurozone, suffering from sluggish economies and high unemployment. 
 
&quot;Our societies are stagnating, we are not growing. That would give impetus to extreme parties of the right,&quot; said Stiglitz, as far-right parties gain ground in France, the Netherlands, Germany and Austria in part due to high unemployment. 
 
&#39;Mount Sinai&#39; 
 
Stiglitz, who loosened his tie for the interview in a sweltering Paris, took a blistering swipe at the rules underpinning the single currency, as well as those governing the European Central Bank. 
 
&quot;You have to change the rules when the rules are wrong. If you have the wrong rules, then the consequence is a disaster,&quot; he stressed. 
 
&quot;These rules are not like the ten commandments that God gave from Mount Sinai,&quot; he said, adding that the economics and politics behind the eurozone&#39;s fiscal and monetary rules &quot;needs to be rethought.&quot; 
 
He took aim at both the Stability and Growth pact - which limits member state&#39;s budget deficits to a maximum of three per cent of total output - as well as the strict rules governing the ECB. 
 
The European Central Bank has as its mandate to keep inflation to &quot;close to but below two per cent&quot; but unlike the Federal Reserve in the United States, does not have creating jobs as one of its objectives. 
 
&quot;They tied the hands of the countries in Europe and then they tied the hands of the central bank and said &#39;focus just on inflation&#39;,&quot; charged the economist. 
 
Auf wiedersehen Germany? 
 
So what is the solution, according to Stiglitz?&nbsp; 
 
&quot;More Europe&quot; and &quot;less austerity that just leads to contraction&quot;. 
 
He called for eurobonds&nbsp;- allowing eurozone countries to pool debt issuance that is a taboo subject in Germany.&nbsp; 
 
The economist also appealed for &quot;common deposit insurance, a common way to resolve the problems in the banks.&quot; 
 
And he aimed a barb at Germany, Europe&#39;s economic and political powerhouse that spearheaded the drive towards austerity in the wake of the eurozone&#39;s debt and banking crisis. 
 
&quot;The view that you can recover to full employment and to prosperity by austerity is rejected by most economists, rejected by the IMF, but still seems to be the dominant view in the German government, and particularly in the finance ministry,&quot; he charged. 
 
&quot;The easiest way would be for Germany to leave Europe.&quot; 
 
(AFP)

The single currency, he says, takes away member states' ability to make crucial adjustments to their economies

Badly conceived and economically wrong, the euro is at the heart of most of the eurozone's problems such as stagnation, unemployment and the rise of the far-right, Nobel-prize-winning economist Joseph Stiglitz told AFP on Wednesday. The outspoken economist said the single currency was structurally flawed from the outset and takes away member states' ability to make crucial adjustments to their economies. "What they did was to put the cart before the horse. They tried to create the euro before they had the institutions," said the former World Bank chief economist, 73. While the euro might be a boon for "a few people and the bankers who can move money more easily around," it's less positive for ordinary individuals in the eurozone, suffering from sluggish economies and high unemployment. "Our societies are stagnating, we are not growing. That would give impetus to extreme parties of the right," said Stiglitz, as far-right parties gain ground in France, the Netherlands, Germany and Austria in part due to high unemployment. 'Mount Sinai' Stiglitz, who loosened his tie for the interview in a sweltering Paris, took a blistering swipe at the rules underpinning the single currency, as well as those governing the European Central Bank. "You have to change the rules when the rules are wrong. If you have the wrong rules, then the consequence is a disaster," he stressed. "These rules are not like the ten commandments that God gave from Mount Sinai," he said, adding that the economics and politics behind the eurozone's fiscal and monetary rules "needs to be rethought." He took aim at both the Stability and Growth pact - which limits member state's budget deficits to a maximum of three per cent of total output - as well as the strict rules governing the ECB. The European Central Bank has as its mandate to keep inflation to "close to but below two per cent" but unlike the Federal Reserve in the United States, does not have creating jobs as one of its objectives. "They tied the hands of the countries in Europe and then they tied the hands of the central bank and said 'focus just on inflation'," charged the economist. Auf wiedersehen Germany? So what is the solution, according to Stiglitz? "More Europe" and "less austerity that just leads to contraction". He called for eurobonds - allowing eurozone countries to pool debt issuance that is a taboo subject in Germany. The economist also appealed for "common deposit insurance, a common way to resolve the problems in the banks." And he aimed a barb at Germany, Europe's economic and political powerhouse that spearheaded the drive towards austerity in the wake of the eurozone's debt and banking crisis. "The view that you can recover to full employment and to prosperity by austerity is rejected by most economists, rejected by the IMF, but still seems to be the dominant view in the German government, and particularly in the finance ministry," he charged. "The easiest way would be for Germany to leave Europe." (AFP)

Euro the root of all eurozone's ills, says economist Joseph Stiglitz

Italy&#39;s Banca Monte dei Paschi di Siena came a distant last in European Union bank stress test results released on Friday, as the world&#39;s oldest bank announced sweeping reforms in a bid to stay afloat. 
 
Under the European Banking Authority&#39;s economic shock scenario, BMPS would suffer a 14.23 per cent plunge in its core capital ratio, a measure of stability, by 2018. That would bring the ratio for BMPS, which is both the world&#39;s oldest bank and Italy&#39;s third largest, down to minus 2.23 per cent, the only one of the 51 banks tested to end up in negative territory. 
 
The announcement came shortly after the bank&#39;s board announced a rescue plan for shifting the billions of euros in bad loans that have weighed down on the embattled lender, which was founded in 1472. 
 
Some analysts fear that the bank&#39;s bad debts may trigger a banking crisis in Italy and eurozone turmoil. Shares in BMPS, which has become the eurozone banking sector&#39;s problem child, had soared on the Milan stock exchange earlier Friday, boosted by a possible new lifeline tabled by a veteran Italian banker and Swiss giant UBS. 
 
After days of discussion leading up to a 10-hour meeting on Friday, the BMPS board of directors announced a plan to offload 9.2 billion Euros ($10.3 billion) of bad loans&nbsp;or amounts owed to a creditor that are unlikely to be paid. 
 
The plan aims to &quot;reach a structural, definitive solution&quot; for bad loans, said the bank&#39;s CEO Fabrizio Viola. 
 
Even before the plan was finalised, BMPS&#39;s stock rose over 10 per cent, as it was seen as a welcome alternative to drastic restructuring measures demanded by the European Central Bank. It closed the day at just under 0.31 Euros, up 6.3 per cent. 
 
The ECB had told BMPS, Italy&#39;s third-biggest bank, this month that it must offload 9.6 billion Euros of non-performing assets within two years. The bank, working with US bank JP Morgan and Italy&#39;s Mediobanca, has submitted a plan to shift the bad loans with the help of the Atlante fund, created specifically to take on doubtful banking assets. 
 
The plan also calls for a capital increase of five billion Euros to boost capital reserves. But late Thursday, BMPS said it had received an alternative proposal from UBS and Corrado Passera, a former chief executive of the Intesa Sanpaolo bank and ex-minister for economic development. 
 
Meanwhile, the second worst performer in the EBA tests, Allied Irish Banks, would see a ratio fall of 8.47 per cent. &quot;The EBA&#39;s 2016 stress test shows the benefits of the capital strengthening done so far are reflected in the resilience of the EU banking sector to a severe shock,&quot; said Andrea Enria, chair of the London-based EBA. But he added: &quot;This is not a clean bill of health&quot;. 
 
Deutsche Bank, Germany&#39;s top lender, would fall by 5.4 per cent and Royal Bank of Scotland by 7.46 per cent. &quot;We come out of the 2016 stress test stronger than in 2014, although this year&#39;s exercise was more demanding,&quot; Deutsche Bank&#39;s chief executive John Cryan said. &quot;The stress test shows that the bank is well equipped for tough times,&quot; he said. 
 
The 51 banks tested account for 70 per cent of the sector. They showed an average core capital ratio of 13.2 per cent in 2015. Under an adverse economic scenario this would fall to 9.4 per cent by the end of 2018. 
 
The sector&nbsp;would, therefore, remain above EU legal minimum levels in case of the shock being tested, an EU economic contraction of 1.2 per cent in 2016 and 1.3 per cent in 2017 followed by 0.7 per cent growth in 2018. 
 
The EBA said the scenario remained valid following Britain&#39;s vote last month to leave the European Union since its tests were with worse growth figures that the worst-case Brexit scenario. 
 
&quot;The results of EU-wide bank stress tests show that euro area banks improved their resilience,&quot; the European Central Bank said in a statement. &quot;Overall supervisory capital expectations will remain broadly stable compared to 2015,&quot; it added. 
 
(AFP) 
&nbsp;

The bank's board has announced a rescue plan for shifting the billions of euros in bad loans that have weighed down on BMPS

Italy's Banca Monte dei Paschi di Siena came a distant last in European Union bank stress test results released on Friday, as the world's oldest bank announced sweeping reforms in a bid to stay afloat. Under the European Banking Authority's economic shock scenario, BMPS would suffer a 14.23 per cent plunge in its core capital ratio, a measure of stability, by 2018. That would bring the ratio for BMPS, which is both the world's oldest bank and Italy's third largest, down to minus 2.23 per cent, the only one of the 51 banks tested to end up in negative territory. The announcement came shortly after the bank's board announced a rescue plan for shifting the billions of euros in bad loans that have weighed down on the embattled lender, which was founded in 1472. Some analysts fear that the bank's bad debts may trigger a banking crisis in Italy and eurozone turmoil. Shares in BMPS, which has become the eurozone banking sector's problem child, had soared on the Milan stock exchange earlier Friday, boosted by a possible new lifeline tabled by a veteran Italian banker and Swiss giant UBS. After days of discussion leading up to a 10-hour meeting on Friday, the BMPS board of directors announced a plan to offload 9.2 billion Euros ($10.3 billion) of bad loans or amounts owed to a creditor that are unlikely to be paid. The plan aims to "reach a structural, definitive solution" for bad loans, said the bank's CEO Fabrizio Viola. Even before the plan was finalised, BMPS's stock rose over 10 per cent, as it was seen as a welcome alternative to drastic restructuring measures demanded by the European Central Bank. It closed the day at just under 0.31 Euros, up 6.3 per cent. The ECB had told BMPS, Italy's third-biggest bank, this month that it must offload 9.6 billion Euros of non-performing assets within two years. The bank, working with US bank JP Morgan and Italy's Mediobanca, has submitted a plan to shift the bad loans with the help of the Atlante fund, created specifically to take on doubtful banking assets. The plan also calls for a capital increase of five billion Euros to boost capital reserves. But late Thursday, BMPS said it had received an alternative proposal from UBS and Corrado Passera, a former chief executive of the Intesa Sanpaolo bank and ex-minister for economic development. Meanwhile, the second worst performer in the EBA tests, Allied Irish Banks, would see a ratio fall of 8.47 per cent. "The EBA's 2016 stress test shows the benefits of the capital strengthening done so far are reflected in the resilience of the EU banking sector to a severe shock," said Andrea Enria, chair of the London-based EBA. But he added: "This is not a clean bill of health". Deutsche Bank, Germany's top lender, would fall by 5.4 per cent and Royal Bank of Scotland by 7.46 per cent. "We come out of the 2016 stress test stronger than in 2014, although this year's exercise was more demanding," Deutsche Bank's chief executive John Cryan said. "The stress test shows that the bank is well equipped for tough times," he said. The 51 banks tested account for 70 per cent of the sector. They showed an average core capital ratio of 13.2 per cent in 2015. Under an adverse economic scenario this would fall to 9.4 per cent by the end of 2018. The sector would, therefore, remain above EU legal minimum levels in case of the shock being tested, an EU economic contraction of 1.2 per cent in 2016 and 1.3 per cent in 2017 followed by 0.7 per cent growth in 2018. The EBA said the scenario remained valid following Britain's vote last month to leave the European Union since its tests were with worse growth figures that the worst-case Brexit scenario. "The results of EU-wide bank stress tests show that euro area banks improved their resilience," the European Central Bank said in a statement. "Overall supervisory capital expectations will remain broadly stable compared to 2015," it added. (AFP)

EU bank stress test: World's oldest bank, BMPS ends in negative

Talks on Britain leaving the European Union must be carried out quickly to limit uncertainty, ECB Governing Council member Francois Villeroy de Galhau said today, adding London&#39;s financial centre was at risk of losing its prized &quot;EU passport&quot;. 
 
Banks based in London rely on a so-called EU passport to operate across the bloc&#39;s capital market unhindered. Some banks have said they would shift operations to the euro zone if Britain left the EU. 
 
The City of London will not be able to keep that passport if Britain leaves the EU&#39;s single market of trade in goods and services, Villeroy told France Inter radio. 
 
&quot;There is a precedent, it is the Norwegian model of European Economic Area, that would allow Britain to keep access to the single market but by committing to implement all EU rules,&quot; he said. 
 
&quot;It would be a bit paradoxical to leave the EU and apply all EU rules, but that is one solution if Britain wants to keep access to the single market.&quot; 
 
Central banks are efficiently dealing with the fallout of Thursday&#39;s UK vote to leave the EU, said Villeroy, who is also governor of the French central bank, adding: &quot;The euro is a solid currency.&quot; 
 
&quot;What happened on Thursday is bad news, first of all for Britain,&quot; he said. &quot;Of course there will be negative consequences for the European economy but there will be much more limited than the negative consequences all experts forecast for the UK economy.&quot; 
 
Brexit does not put the French economy at any risk of contracting in the next quarters, he said, confirming past growth forecasts of at least 1.4 per cent for 2016. 
 
(Reuters)

Some London-based banks have said they would shift operations to the euro zone if Britain left the EU

Talks on Britain leaving the European Union must be carried out quickly to limit uncertainty, ECB Governing Council member Francois Villeroy de Galhau said today, adding London's financial centre was at risk of losing its prized "EU passport". Banks based in London rely on a so-called EU passport to operate across the bloc's capital market unhindered. Some banks have said they would shift operations to the euro zone if Britain left the EU. The City of London will not be able to keep that passport if Britain leaves the EU's single market of trade in goods and services, Villeroy told France Inter radio. "There is a precedent, it is the Norwegian model of European Economic Area, that would allow Britain to keep access to the single market but by committing to implement all EU rules," he said. "It would be a bit paradoxical to leave the EU and apply all EU rules, but that is one solution if Britain wants to keep access to the single market." Central banks are efficiently dealing with the fallout of Thursday's UK vote to leave the EU, said Villeroy, who is also governor of the French central bank, adding: "The euro is a solid currency." "What happened on Thursday is bad news, first of all for Britain," he said. "Of course there will be negative consequences for the European economy but there will be much more limited than the negative consequences all experts forecast for the UK economy." Brexit does not put the French economy at any risk of contracting in the next quarters, he said, confirming past growth forecasts of at least 1.4 per cent for 2016. (Reuters)

ECB's Villeroy: Brexit talks must be quick, City of London at risk of losing 'EU passport'

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