European Central Bank: Governments must do more for economy

The ECB’s stance wasn’t entirely unexpected given the relative strength of recent economic data. Oil production and drilling companies bucked the trend, getting a lift from a sharp increase in crude oil prices. “It was a disappointment for the market that more QE was not announced by the European Central Bank”.

KEEPING SCORE: Japan’s benchmark Nikkei 225 fell 0.2 percent in the morning session to 16,927.20. The Standard & Poor’s 500 index slid 2 points, or 0.1 percent, to 2,183.

However, with Eurozone inflation still way below target and the ECB also trimming its 2017 growth forecast, Draghi said the bank was looking at options to enable it to pursue the money-printing program.

USA stocks fell modestly overnight as disappointment over the lack of action by the European Central Bank overshadowed a surge in oil prices and upbeat jobless claims data.

The ECB kept its benchmark refinancing rate at 0 percent and also did not change its trillion-euro bond-buying plan, saying the program will run until the end of March 2017 or beyond if necessary.

In a fresh dig at politicians, Draghi said that to reap the full benefits from the ECB’s monetary policy measures, “other policy areas must contribute much more decisively, both at the national and at the European level”.

“President Draghi’s comment that an extension of the current quantitative easing program was not discussed led to a hawkish market interpretation of the meeting”, Shane Oliver, head of investment strategy at AMP Capital in Sydney, wrote in a note.

The ECB cut its growth forecast for next year to 1.6 per cent from the 1.7 per cent seen in June, to account for risks including the expected effect of Britain’s decision to leave the EU, Mr Draghi said. United Kingdom government bonds were leading the way lower, with 10-year yields up around 0.1 percentage point at 0.856%.

The dollar eased against its major counterparts in Thursday trading with focus on expected inaction by the European Central Bank but continued scrutiny of broader central bank policy persisting as the major policy-setting panels all meet this month. Benchmark U.S. crude was up 58 cents, or 1.3 percent, to $46.8 a barrel in NY.

Among risers, British software company Micro Focus surged 14.7%, the best-performing stock on the STOXX 600 index, after sealing an $8.8 billion deal for Hewlett Packard Enterprise to merge its non-core software assets with Micro Focus’s business.

Meanwhile China released stronger-than-expected trade data in August, as yuan-denominated exports rose 5.9 percent in August from a year earlier, while yuan-denominated imports rose 10.8 percent.

The single currency bought $1.1246 and 114.20 yen in Tokyo, against $1.1242 and 114.36 yen in New York Wednesday when it retreated on news German August industrial production slipped 1.5 percent from July.

Eurozone stock markets fell in response to the lack of more stimulus, while the euro climbed.