U.S. and European equities ease on ECB hopes
The U. S. and European equities eased on Wednesday after U. S. economic data suggested an increase in strength of the world's biggest economy, while German data triggered expectations of monetary easing by the European Central Bank (ECB).
The Dow Jones industrial average shed 42.32 points, or 0.25 per cent, to close at 16,633.18; while The S&P 500 suffered a loss of 2.13 points, or 0.11 per cent, to 1,909.78 points. The NASDAQ Composite slipped 11.994 points, or
0.28 per cent, to close at 4,225.075.
U. S. crude dropped more than $1 per barrel, while Brent slipped due to persistent tensions in Libya and Ukraine. Brent LCOc1 edged down 21 cents at $109.81 per barrel.
A rally in German Bunds overflew U. S. Treasuries. Yields on German 10-year Bund slipped to 1.287 per cent, lowest so far this year. German yields slipped after the country's latest economic data showed an unexpected increase in unemployment.
A deceleration in the supply of euro also triggered expectations that ECB could announce more monetary easing at next month's meeting.
Phyllis Papadavid, a global-currency strategist at BNP Paribas' London-based corporate & investment-banking division, said, "This will be a source of concern for the ECB in addition to the contraction in credit growth. It adds to the case for ECB easing and is consistent with a euro-bearish theme."
The euro shed 0.1 per cent to US$1.3620 on Wednesday. On Tuesday, the eighteen-nation common currency declined to US$1.3613, the lowest since February 2013.
The ECB is scheduled to meet on June 5, 2014.
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