Thungen Financial 7th July 2014 - European Union Update

July 7, 2014 - PRLog -- Thungen Financial is a financial management company for international investors and expatriates. Realise your investment goals with online access to Stocks, CFDs, Futures and Forex trading on 17 exchanges worldwide. Manage your money conveniently with our Multi-Currency Accounts. And take advantage of our 0% entry-fee investment funds.

Thungen Financial 7th July 2014 - European Union Update

Markets globally continue to benefit from robust data out of the US which appears to be the driving force behind the index highs we have repeatedly seen of late.

It's been a full month since the European Central Bank made a landmark rate decision that saw them reduce their deposit and benchmark rates in an effort to fight inflation.

Their reduction of the deposit rate from 0% to -0.10% and their benchmark from 0.25% to 0.15% was heralded as an innovative way to spur banks into lending more and faster without having to implement a similar policy as its US cousins. Now, one month on, President Mario Draghi has confirmed that this policy will be a long term effort and that for the foreseeable future rates would need to be kept at this level. He also advised a change up in reporting as of January 2015 whereby rate decisions would be announced every 6 weeks as opposed to monthly and that notes of all meetings will be released like the newly implemented reporting by the Bank of England.

The action taken by the ECB will likely be attributed to the performance of the Eurozone which has seen its local markets at close to or past all time highs since the beginning of the 2nd quarter as rumours of the suggested rate change hit the markets. What was surprising was the information released late last week which saw a contradiction on the business sentiment seen in the region.

The ECRI reported late last week that it saw  inflationary pressure in the EU at a 25mth high in May, providing its EU Future Inflation Gauge at 95.3 in May against 94.0 last seen in April. This was contradicted by Markits monthly survey which saw new business orders increase at its fastest pace in 3 years despite actual business for the region slowing at its lowest for 6mths. The Economic Cycle Research Institutes data would imply that the rate change by the ECB has seen some negative effects initially but that businesses are gearing up for the 2nd half of 2014 to take full advantage of cheaper lending, something that the ECB is desperately hoping will continue.

European markets are seen opening slightly higher today.

European Markets as of 7th July 2014

FTSE 6,866.05 +0.01%          Dax  10,009.08 -0.20%

CAC40 4,468.98 -0.47%

BEL20 3,180.12 +0.62%          Zurich SMI 8,678.22 -0.19%

MICEX 1,514.27 +0.01%

For more information on the services provided by Thungen Financial please visit our website at www.thungenfinancial.com or contact us on info@thungenfinancial.com.

DISCLAIMER  The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Thungen Financial Advisors. All market data within this release is for your general information and enjoys indicative status only. Thungen Financial Advisors does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.