Market Snapshot – ECB Keeps Rates Unchanged, Stocks Retreat on Trump Tax Plan

European Central Bank Leaves Interest Rates Unchanged, Stands Pat on Policy

The European Central Bank announced on Thursday to leave interest rates unchanged at its record lows. Moreover, the central bank did not indicate any dramatic changes in its policy.

ECB President, Mario Draghi delivered a cautious press conference but signaled that high inflation will require a respond by the central bank.

Markets reacted to Draghi’s comment that he sees downside risks diminished. The Euro jumped higher to trade at 1.0925 during Draghi’s press conference but retreated to trade at 1.0861.

Global Stocks Mixed after Trump Tax Plan, French election Rally Fades

European stock markets are heading broadly south, halting six days of gains as are disappointed of Trump’s tax plan and as concerns of French elections second round are increasing. The Macron rally saw the DAX surging to new all-time highs and helped the CAC 40 to break its long term downtrend, but investors need new impetus to push gains out even further.

The FTSE 100 is down as Sterling strengthens, while Macron’s lackluster start to the second round of the French presidential election is adding to pressure on Eurozone markets, even as he remains a strong favorite to beat Le Pen. The DAX is down, but remains at very high levels above 12400, IBEX and MIB are underperforming and the Euro Stoxx 50 is also lower. Markets moved mainly sideways in Asia, as the BoJ left policy unchanged, elsewhere markets managed slight gains as investors mulled the implications of Trump’s tax plans.

Oil Prices Fall after Inventory Report

Crude oil futures are called lower as investors continue to react to a jump in U.S. fuel inventories. On Wednesday, the U.S. Energy Information Administration’s weekly inventories report for the week-ending April 21 showed a draw in crude oil stocks, but gasoline inventories surged as refiners produced more fuel than the market would consume.

Prices could continue to fall if gasoline stocks keep rising, due to expectations of lower demand. If the low demand continues into the driving season then crude oil inventories could also rise.

Crude oil prices dropped 1.69% to trade at $48.77.

Trump Agrees That NAFTA Can Stay for Now

President Donald Trump told the Canadian and Mexican leaders that he is willing to renegotiate the NAFTA agreement and would not immediately terminate the free trade agreement.

The Canadian dollar strengthens versus the US dollar and the Mexican peso follows to strengthens 1.01% versus the greenback.