Ahead of the Easter break, equity markets in Europe weakened again amid ongoing anxiety over the impact of tariffs on the global economy. On Thursday, the ECB decided to cut the key deposit rate to 2.25% from 2.50% and lowered growth forecasts in reaction to the trade war.
“The main surprise following the ECB’s widely expected rate cut was the relatively dovish guidance given,” says Roelof Salomons, chief strategist at BlackRock Netherlands.
“The ECB may have to alter its path to navigate both tariff pass-through and fiscal stimulus in Europe, with little fresh data to light the way since its last meeting. ECB President Christine Lagarde seemed to be more concerned about risks to growth than about inflation.”
Stock Markets Trade Lower
Both the Stoxx Europe 600 and the Morningstar Europe Index closed lower, dragged down by the healthcare and technology sectors in particular.
At the time of European market close, the S&P 500 and the Nasdaq composite were in positive territory, but the Dow Jones index was lower. Nvidia NVDA was under pressure once again, after dropping 7% on Wednesday. The declines in the chipmaker’s stock follow the company’s disclosure that the US government has restricted its semiconductor exports to China.
At the same time, President Donald Trump openly lashed out at the Federal Reserve Chair Jerome Powell, stating that “termination cannot come fast enough” and accusing him of being “always too late and wrong.” He criticized the Fed chief for not following the example of the ECB and cutting rates.
Asia Stocks Move Higher
In Asia overnight, Japan’s Nikkei 225 gained 1.35%, supported by hopes of a tariff deal with the US. In Hong Kong, the Hang Seng Index closed nearly 2% higher as investors anticipated the rollout of countermeasures by China to mitigate the impact of the 145% US tariffs.
In bond markets, US Treasury yields have basically maintained yesterday’s level, with the 10-year bond yield at 4.31%. Eurozone bond yields slightly fell, with the 10-year German bund at 2.47%, from 2.51% the previous day.
In currency markets the euro continue to hover around its three-year high of $1.37 against the dollar.
Gold paused its record-breaking rally amid optimism over US-Japan trade talks and remains around $3,300 an ounce after setting a new record on Wednesday at $3,352.
Finally, bitcoin reached $84,770, down 0.3% from Wednesday.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
