Global share markets are broadly trading higher as the prospect of further policy stimulus in China and Europe whetted risk appetites while sending the euro skidding. The single currency was near 28- month lows having shed 1.2 percent on Friday when European Central Bank President Mario Draghi surprised by declaring his commitment to fighting deflation. That came hot on the heels of an unexpected cut in interest rates from the People’s Bank of China. According to sources Beijing was ready to ease further to head off slowing inflation.
Oil Prices higher on China surprise rate cut
Oil prices held on to small gains Friday, after an early rally was sparked by China’s decision to cut interest rates, fanning hopes for increasing demand from the world’s second-largest crude consumer. The move came after oil prices had fallen 30% since June on worries about global production outpacing demand, and a growing expectation that the Organization of the Petroleum Exporting Countries will decided to curb production when the cartel meets next week. A stimulus for the Chinese economy is something that gets macroeconomic investors to buy all kinds of commodities, oil included, said Andrew Lebow, senior vice president for energy derivatives at Jefferies Bache LLC. With lower interest rates, the Chinese could spend freely enough to support 100,000 barrels of oil demand growth in 2015 in a best-case scenario, he said.