Euro grinds higher International stocks stutter, before ECB

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Euro grinds higher International stocks stutter, before ECB

LONDON (Reuters) – The euro climbed and stocks inched higher on Thursday, as markets waited to hear just how near the European Central Bank is to scaling back its more than 2 trillion euro ($2.75 trillion) stimulation program. The was relief of sorts too after Donald Trump and U.S. Congress leaders struck a surprise agreement to push a showdown on the nation’s debt limit back to December, and that there had been no further escalation in the North Korea crisis. A fifth day of gains from automobile stocks helped German stocks outperform a slow open for European equities with banks under pressure before the much-awaited ECB meeting. [. EU] Though few investors expect to find a clear frame just, ECB President Mario Draghi is expected to lay the groundwork to wind back its asset purchase program. The sharp increase of the euro this year has begun to cause some distress. Higher drifted against a wide swathe of currencies. [FRX/] A fourth day of earnings took it back above $1.1950 against the dollar EUR= while a wide tick higher in European bond yields pushed 10-year German debt up 2 basis point to 0.36 percent and Italian and Spanish newspaper to 1.45 and 2 percent respectively. [GVD/EUR] “Most people are on the exact same page that the ECB will do something to reduce their accommodation (soon),” said JP Morgan Asset Management Strategist Nandini Ramakrishnan. “We don’t expect them to announce the start of tapering this meeting, but we do expect them to give us an idea they will start in January. The details are more likely to come at the October meeting,” she added. Canada’s dollar CADafter a surprise interest rate increase on Wednesday reminded everybody that monetary settings won’t stay, = D4 held its profits. It revealed the very clear implication of policy tightening now – that the dollar surged more than 2 percent to its highest levels in two years. And analysts say that’s the main conundrum of the ECB. All the financial activity signals suggest it ought to take its foot off the gas, but the 13 percent surge of the euro already this season is playing havoc with its sub-target inflation outlook and it’ll need to step lightly for fear of compounding the issue with a different exchange rate jump. The Swedish crown, SEK= which is the only European money to have climbed against the euro this year, fell after its central bank said it was introducing a buffer. That should give more leeway on policy moves to it. FILE PHOTO – A U.S. one-hundred dollar bill (C) and Japanese 10,000 yen notes are dispersed in Tokyo, in this February 28, 2013 picture illustration. REUTERS/Shohei Miyano/File PhotoU.S. DEBT DEAL Asian markets had been mildly. China’s yuan rose past the psychologically important 6.5 per dollar level for the first time since May 2016. MSCI’s broadest index of Asia-Pacific shares . MIAPJ0000PUS gained 0.3 percent while Japan’s Nikkei . N225 climbed 0.2 percent. South Korea’s KOSPI . KS11, which has been bombarded by tensions over North Korea, jumped 1.2 percent too, on course to mark its biggest gain in four months amid signs that major powers were talking intensively on the circumstance. Speaking in Russia, South Korean President Moon Jae-in said that there would be no war on the peninsula and he was having talks with the leaders of Japan, Russia and the USA. Sentiment had also been aided after U.S. President Donald Trump forged a sudden deal with Democrats in Congress to raise the U.S. debt limit and supply government financing until Dec. 15, embracing his political adversaries and blindsiding fellow Republicans in a rare bipartisan accord. There was some disappointment the deal had been term. But U.S. economic data was also fairly optimistic. A gauge of services sector activity by the Institute for Supply Management (ISM) [USNPMI=ECI] accelerated in August. “The deadline on the debt ceiling has been extended just by three months so it is going to come back to haunt markets again after this year. Still, markets liked it as we don’t have to worry about it for today,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management. The news increased yields on U.S. Treasuries, with the 10-year yield holding back to 2.1 percent US10YT=RR from its 10-month low of 2.054 percent touched on Wednesday. In Commodities, oil prices maintained much of this week’s strong gains as the reopening of U.S. Gulf Coast refineries enhanced the outlook after sharp falls due to Hurricane Harvey. U.S. crude futures CLc1 were at $49.07 per barrel, down 0.2 percent from late U.S. levels after having gained 3.0 percent in the previous three sessions. Brent LCOc1 traded at $54.11 a barrel, down 0.2 percent but still not far from its 3-1/2-month high of $54.31 touched on Wednesday. Traders are now shifting their attention to Hurricane Irma, ranked as one of the five most powerful hurricanes in the past 80 years, which passed afternoon and expected to hit Florida at the weekend. Additional reporting by Hideyuki Sano in Tokyo; editing by Ralph BoultonOur Standards:The Thomson Reuters Trust Principles.

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