Oil bounces on improved sentiment as equity markets rally

Market sentiment was boosted, especially in equity markets due to expectations that the European Central Bank will launch a fresh round of monetary stimulus. Japan’s Nikkei jumped more than 5 percent on Friday, helped by a weaker yen. There was also a bounce in oil prices.

At its policy meeting on Thursday, the ECB kept interest rates on hold as expected, but President Mario Draghi was dovish about the inflation outlook for the Euro zone and hinted there could be more stimulus. Markets expect more ECB quantitative easing as soon as March.

The euro plunged below $1.08 on Draghi’s comments yesterday during a press conference after the policy meeting. Heightened expectations for further easing by the ECB had the euro eyeing a third straight day of declines as it fell 0.2 per cent to $1.0848 in Asian trade.

The improved risk appetite in markets today hurt safe havens. Japan’s yen weakened 0.2 per cent to Y117.92 per dollar this morning – it had hit a fresh one-year high of Y115.98 on Wednesday amid this week’s market volatility.

In morning trade, Brent was up 0.9 per cent at $29.52, while WTI was up 0.7 per cent at $29.73. On Thursday, both prices ended more than 5 per cent higher, with WTI briefly crossing above the $30 mark.

The post Oil bounces on improved sentiment as equity markets rally appeared first on FXTM Blog.

Source:: Oil bounces on improved sentiment as equity markets rally

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