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Central banks' dovish cooing keeps world stocks lulled near two-week highs

Credit: Reuters Studio
Published on June 19, 2019 - Duration: 01:29s

Central banks' dovish cooing keeps world stocks lulled near two-week highs

World stocks held near two-week highs on Wednesday as investors bet on a fresh wave of monetary stimulus.

David Pollard reports.

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Central banks' dovish cooing keeps world stocks lulled near two-week highs

Countdown to the Fed.

1800 GMT on Wednesday is when its forward guidance will soothe market concerns with a clear hint of more monetary stimulus to come.

At least, that was the bet keeping world stocks close to two-week highs, bond yields at multi-year lows.

And it might not be the only stimulus game in town.

After a strong Wall Street, and a near two per cent rise in Asian shares.

Europe was still digesting Tuesday's shock statement from Mario Draghi, signalling more stimulus in the ECB pipeline too.

It already has some analysts pricing in a July rate cut.

If for others, it's a question of wait and see.

SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "Central banks, and particularly the ECB, very much likes to flag its actions well in advance.

So we're likely to see a horizon of six months at least before any action will be taken, which essentially takes us into the end of the year." Concern over U.S./China trade drove European shares around 6% lower in May.

Expectations of policy easing have helped recoup most of those losses.

Market sentiment was also buoyed by news Donald Trump will meet China's Xi Jinping at the G20 summit this month.

And for those caught in the trade war crossfire, like Japan, any breakthrough would be timely.

Its exports, according to data on Wednesday, fell for a sixth month in May as shipments especially to China dwindled.

Volumes were down nine per cent year on year.

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