Prepared to deploy more stimulus if needed — ECB’s Draghi

“The euro zone recovery is continuing, but it seems like driving with the handbrake on”, said ING economist Vanden Houte.

Spain was the standout among the eurozone’s big economies, growing by a quarterly rate of 0.8 percent. That was weaker than expected and represents a slowdown since the second quarter, when the economy grew by 0.4%.

Losses in Europe were almost as bad as the United States, after official data showed growth in the 19-nation eurozone slowed to 0.3 per cent in the third quarter, with the economy in powerhouse Germany cooling as France returned to expansion.

The biggest move across major Asian markets was the Australian dollar, which jumped more than 1 percent to US$0.7150 after figures showed that the country’s economy created 58,600 jobs last month. In three members of the currency club-Estonia, Finland and Greece-output fell. Consumer spending has been boosted by lower energy prices, which have had much the same effect as tax cuts.

Policy makers are tussling over whether more action will be needed as soon as the next policy meeting on December 3. This is tied to his desire to enshrine the EU as a multi-currency union and make sure British interests, particularly those of the City of London, are protected despite sitting outside the European Monetary Union.

The yield on Germany’s 10-year bund, the euro area’s benchmark sovereign debt, fell 14 basis points, or 0.14 percentage point, in the week to 0.56 percent as of the market close at 5 p.m. London time Friday.

In currencies, the euro was down 0.3% against the dollar at $1.0730, pressured by Mr. Draghi’s hints of further easing. Falls in new foreign orders for German manufacturers suggest the weakness will persist.

“I think the European Central Bank will be quite selective in which corporates it allows itself to buy, and to avoid further political backlash they will want to stick to corporates which as far as possible they can defend as being without additional credit risk”, Shannon said. One likely measure will be an extension of its quantitative-easing programme, so that it carries on into 2017 rather than finishing as now scheduled at the end of September.

“Stellar Australian consumer confidence and labour market data support our economists’ call for the RBA leaving rates unchanged this year”, the bank’s strategists said in a note.

With the Fed on path to raise interest rates at its December meeting and the European Central Bank set to add more stimulus, the monetary divergence has sharpened, putting downward pressure on the euro. The purchases are meant to further lower long-term interest rates, pump cash into the banking system, weaken the euro to juice exports, and drive more investments into stocks.