World stocks wilt with the euro rising on ECB winding down its stimulus programme
The US Fed raises rates as expected, and intimates two more hikes this year, but concerns about a US-China trade war cast a shadow
London — The euro rose to its highest in a month but world stocks wilted on Thursday, as the European Central Bank (ECB) prepared to pull the plug on its €2.55-trillion, three-year stimulus programme. After the Federal Reserve raised US interest rates for the second time this year and hinted at two more, it was shaping up to be a double-whammy for risk assets that have gained during years of ultra-cheap borrowing conditions. All sectors on the pan-European STOXX 600 index were in negative territory. Basic resources stocks led the decline with a 1.3 drop following weak data from big metals consumer China. The dollar rose after the Fed’s move, then faded in Asia and was still falling as the euro pushed above $1.1820 before the ECB met. Eurozone government bond yields also edged up with German bunds offering 0.49%. US treasuries drifted back though to 2.96% after briefly topping 3% overnight. "I think its pragmatic for the Fed to take these moves, because if you are not going to make t...
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