EURUSD near multi-year low after Dovish ECB

Summary:

  • Dovish ECB sends EURUSD sub 1.13

  • Stocks swoon as ECB boost fades

  • Stock of the week: Chubb Limited

  • Ripple CEO say JPM Coin won’t be used by other banks

 

There’s been some sizable moves seen in response to the latest ECB rate decision, with the Governing Council performing a pretty dramatic Dovish turn by slashing forecast for both growth and inflation as well as announcing further stimulus in the form of a Targeted Longer-Term Refinancing Operations (TLTROs). This is now the third time the central bank have chosen to implement what in effect is an injection of liquidity into the banking sector in an effort to provide further stimulus. The single currency has come under pretty heavy selling pressure since the news broke, bond yields have fallen and stocks have pared there initial moves higher with the banking sector in particular on the slide. The EURUSD has dropped by around 100 pips since the rate decision and the market is approaching prior lows near 1.1220.

 

There was an interesting reaction in stock markets to the latest ECB decision with initial optimism giving way to pessimism in little time at all with several major benchmarks breaking lower not long afterwards. Nowhere was this more evident than in the EuroStoxx 600 bank index, which jumped higher as the ECB announced the TLTRO but has since reversed in an ugly fashion and come under some heavy selling pressure - weighing on the broader markets as it fell. Deutsche Bank has tumbled after initially moving higher after the ECB announced the TLTRO, with the stock ending lower by more than 5% on the day.

 

Our latest stock of the week is Chubb Limited, one of the world’s biggest P&C insurers. Investing is basically a game of seeking the most attractive risk-return trade-off. Generating big returns was always high on investors’ priority list but importance of managing and mitigating risk grew significantly over the past decades. While everyone seems to be doing their best to transfer risk away there is a group of entities that makes living out of buying and pooling risk - insurers. In this article we will take a closer look at operations of Chubb Limited, one of the world’s biggest property and casualty insurers, as well as how it stands among its rivals.

 

Wednesday was not so successful for the cryptocurrency market as Tuesday. Nevertheless, major virtual currencies managed to deliver some rises during yesterday’s trading. When we take a look at today’s candlesticks, we could observe that cryptos have been trading quite calm so far. However, it is worth noting that Litecoin has touched price levels not seen since early October. According to CoinMarketCap, the capitalization of the whole crypto market stands a little below the $134 billion handle whereas the market capitalization of altcoins sits a little below the $65 billion mark. Brad Garlinghouse, the CEO of Ripple (the San Francisco-based company behind the cryptocurrency), made some remarks on the JPMorgan’s coin during DC Blockchain Summit in Washington. The CEO of Ripple said that presence of JPMorgan as a player in this topic is great, as Coindesk reports. However, Garlinghouse added at a different conference that JPMCoin will not be rather used by other major banks. He thinks that distributed ledger technology may solve problems which could not be solved by stablecoins. As a result, players based on stablecoins may struggle to resolve them.

 

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