Markets rose on Thursday.
The S&P 500 rose 0.3 percent, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.7 percent.
Markets rose after US President Trump announced on Wednesday that, “as a gesture of goodwill”, he would delay the implementation of a tariff hike from 25 percent to 30 percent from 1 October to 15 October.
However, Tom Essaye, president of the Sevens Report, said that “just a delay won’t be a positive catalyst—the market already expects more” while James McCormack, global head of sovereign ratings at Fitch Ratings, said that “we’re some distance from real resolution”.
Markets were further buoyed on Thursday by news that the European Central Bank will cut its deposit rate from -0.4 percent to -0.5 percent and restart open-ended purchasing of long-term government bonds at a pace of €20 billion a month.
In a press conference following the decision, ECB President Mario Draghi urged governments to take fiscal measures to supplement the central bank’s monetary stimulus.
Indeed, ING Chief Economist Carsten Brzeski suggested that “without fiscal stimulus, Draghi’s final stunt will not necessarily lead to a happy end”.
Also, Artur Baluszynski, head of research at Henderson Rowe, said the ECB pushing rates further into negative territory is “essentially a tax on euro zone banks, and for the already weakened bank-financed economy like the euro zone, this move could spell more trouble”.
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