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European stocks edge lower after ECB shock, NFP eyed

FXStreet (Córdoba) - European stocks were little changed Friday, a day after the European Central Bank (ECB) surprised markets by announcing rate cuts and other measures to support economic growth and fight deflation in the Eurozone. Meanwhile, investors are refraining from taking big positions ahead of the US nonfarm payrolls report.

The Stoxx Europe 600 fell 0.32% to 347.77, pulling back from a 2-month high. As for country-specific indexes the UK FTSE dropped 0.29%. The Germany’s DAX 30 was up 0.12% while the France’s CAC 40 shed 0.10%. Spain’s Ibex 35 and Italy’s FTSE MIB were both little changed.

On Thursday, the ECB took a step forward and cut all 3 of its main interest rates and announced it will start purchasing non-governmental securities and asset-backed securities (ABS) next month. However, the bank refrained from committing to unlimited sovereign QE.

Equities markets received the ECB news with optimism. The Stoxx Europe 600 rallied 1.1% yesterday, closing at its highest level since July 3.

Today, Eurozone GDP for the second quarter matched expectations of a 0.7% growth YoY.

In the FX market, majors are taking a breather after yesterday’s fireworks. EUR/USD is nearly flat at the 1.2950 area after bottoming at a 14-month low of 1.2919 on the back of ECB expansionary measures. GBP/USD is trading at 1.6320, after hitting 7-month trough of 1.6285 while USD/JPY is also flat at the 105.20 region, having pulled back modestly from a 6-year peak of 105.70.

As for commodities, gold recovered a tad after hitting a fresh 3-month low. The metal was 0.2% up at $1,264 an ounce while crude oil rose 0.52% to $94.93 a barrel.

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