- European stocks stage mild rally
- Further dovish sounds from ECB offer some support
- UK GDP miss raises stagflation fears
Stocks are nursing a slight bounce after a tough week, but the downside is open. The FTSE 100 found support at the 7,000 marker, testing its lowest in almost a month but holding the recent range for the time being. US markets were lower for a 4th straight day, the Dow Jones losing more than 150 points, the S&P 500 off by half of one percent and now a little over 1 per cent below the all-time highs. A dovish European Central Bank has eased some concerns.
The ECB did little to rock the boat, announcing a modest taper, but this was not exactly hawkish. PEPP will be conducted at a slightly slower pace, but this is all just tinkering at the edges. Stocks found some bid, the euro also rose a touch but turned around – just a hint of noise, no new direction or anything to change the mind of any investors out there. Lagarde stressed it’s not a taper but ‘recalibration’ of PEPP.