European Central Bank may start tweaking policy message in early 2018

European Central Bank may start tweaking policy message in early 2018

The U.S. dollar was already weaker from the previous day, as news about BoJ's tapering on the long-term bond yields had sapped the strength out of the U.S. dollar, which was showing signs of recovery.

Gold contracts for February in the United States increased by 0.2 percent to stand at $1,322.50 an ounce. The euro bought $1.2119, trading around its highest level since January three years ago.

Wall Street futures pointed to a modest rise after NY had suffered its first down day of the year on Wednesday. Two-year German bond yields are near five-month highs at minus 0.62 percent while 10-year bond yields hit two-month highs last week. Price action is expected to see USDJPY eventually touch down to 110.70 in the near term, following the downside breakout from the triangle pattern on the daily chart.

In Asia on Friday, most stock markets resumed their positive start to the year with Hong Kong extending its record run to 14 days.

The US dollar plunged during the European morning Wednesday, following a Bloomberg report that China is considering to slow or halt its purchases of US Treasuries. This has meant that the European Union has, in large part, played a "helper" role in US financial hegemony throughout the postwar era to today. Benchmark U.S. crude slipped 37 cents to $63.55 a barrel in electronic trading on the New York Mercantile Exchange. Italian stock markets outperformed in tandem with bond markets after this week's auctions went without a hitch.

While some have speculated that yesterday's move was only a technical change the move sent a ripple through the bond markets, pushing yields up on U.S. treasuries and other bond markets as traders and investors re-adjusted their positions amidst a worry that they might be underestimating the pace at which central banks might look to withdraw stimulus in the coming months.

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"The minutes suggested a subtle shift in the guidance could come earlier and that was quite surprising for the market, which was expecting any European Central Bank signalling would come in the summer".

Higher long-term yields can help lift profit at banks. The ECB's job is to bring inflation close to 2 per cent and its big fear in recent years has been that the euro zone economy would lapse into deflation. Investors are also keen for the upcoming earnings season, which kicks off Friday with reports from JPMorgan Chase and Wells Fargo.

Analysts at Deutsche Bank are maintaing a negative stance towards the British Pound over the coming 12 months even though they now concede the traditional villian for Pound Sterling - Brexit - will not be the concern it once was. Visit MarketWatch.com for more information on this news. Com Hem shares climbed 3.4%.

The Bank indicated in 2017 that a continued positive performance by the United Kingdom economy and an abatement of Brexit risks could beget further interest rate rises in the future.

The DAX of Germany dropped 0.59 percent and the CAC 40 of France fell 0.29 percent.

The dollar grew weaker in general after data showed higher requests for unemployment benefits made to the USA government, accompanied by a decline in the income for producers. Separately, the United Kingdom goods trade deficit with the rest of the world widened slightly in November to GBP12.2 billion from the revised October figure of GBP11.7 billion.

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