The European Central Bank cut its key interest rate and launched a sweeping package of bond purchases Thursday that lays the ground work for what is likely to be a long period of ultraloose monetary policy, jolting European financial markets and triggering an immediate response from President Trump. The ECB's pre-emptive move was aimed at insulating the eurozone's wobbling economy from a global slowdown and trade tensions. It is the ECB's largest dose of monetary stimulus in 3 1/2 years and a bold finale for departing President Mario Draghi, who looks to be committing his successor to negative interest rates and an open-ended bond-buying program, possibly for years. The move triggered immediate criticism from German banks, while leaving key practical questions unanswered. Primarily: How long can the ECB keep buying bonds without enlarging the pool of assets it can buy? Some analysts estimated it might be less than a year. The euro fell sharply against the dollar after the decision was announced, down 0.4% at $1.10, before recovering. Eurozone government bonds rallied as investors anticipated a longer period of low interest rates and the return to bond markets of a giant buyer. In a tweet, Mr. Trump said the ECB was "trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports." In a statement, the ECB said it would cut its key interest rate by 0.1 percentage point, to minus 0.5%, and start buying EUR20 billion ($22 billion) a month of eurozone debt, restarting a so-called quantitative easing program that it only phased out last December.

The SMI hit a new record high of 10,141 points but ended a volatile day 5 points lower on 10,094 points Thursday. The European Central Bank lowered the deposit rate by 10 basis points to minus 0.50 percent and announced a monthly EUR 20 billion securities purchase programme, disappointing many market participants as insufficient. Newswire Bloomberg fired optimism reporting the US and China had agreed an interim solution to their trade dispute, but later TV station CNBC said a White House representative had denied this. Credit Suisse slid 1.2 percent and UBS 0.9 percent after ECB President Mario Draghi forecast low interest rates for years to come. Also, the ECB’s easing measures aroused fears the Swiss National Bank would follow suit. Zurich Insurance rose 0.7 percent to CHF 382 after analysts raised the target to CHF 350 from CHF 315 and maintained their “hold” rating. Roche slid 0.7 percent despite encouraging drug study results and analysts reiterating their “buy” recommendation.

European shares build on earlier gains after the European Central Bank cut its deposit rate further into negative territory, decreasing it by 10 basis points to negative 0.5%, and said it would restart bond purchases. The Stoxx Europe 600 Index finished the day up 0.77 point, or 0.20%, to 390.48. The FTSE 100 closed in the green, finishing up by 0.09%. Wm. Morrison Supermarkets led the index, closing up 4.7% after posting a 49% rise in first-half pretax profit. Meanwhile, the French CAC-40 Index was up 24.80 points, or 0.44%, to 5642.86 while the German DAX was up 51.18 points, or 0.41%, to 12410.25, but the euro falls against the dollar and sterling. However, the region's banking stocks retreat, with Banco de Sabadell, CaixaBank and Bank of Ireland Group among the sector's biggest losers. "The ECB pushing rates to negative territory is essentially a tax on eurozone banks, and for an already weakened bank-financed economy like the eurozone, this could spell more trouble," says Henderson Rowe.

Stocks climbed intraday after the European Central Bank unveiled a sweeping stimulus package and trade tensions between the U.S. and China showed signs of easing. The Dow Jones Industrial Average rose 133 points, or 0.5%, on track to extend its winning streak to seven sessions, while the S&P 500 increased 0.6%. Both indexes are within 1% of July's all-time highs. The technology-heavy Nasdaq Composite rose 0.6%. Investors have been preoccupied in recent weeks with signs of slowing global growth and uncertainty over the long-simmering trade war with China. The Federal Reserve is expected to follow the ECB next week in cutting interest rates to cushion the economy from a global slowdown. Recent stock-market gains show investors are focusing on the healthy fundamentals of the U.S. economy, said Sandip Bhagat, chief investment officer at Whittier Trust, who said he has been overweight stocks over the past two years, meaning he holds a larger position than the benchmark the firm tracks.

Asian markets were broadly higher on the European Central Bank's overnight decision to cut its key interest rate and launch a sweeping package of bond purchases to spur the flagging eurozone economy. Markets in China and South Korea are closed for a holiday. Markets are also reacting to President Trump's comments on Thursday that he'd be open to a smaller-scale, interim trade deal with China.Japanese stocks were up as the yen weakened after European Central Bank's easing measures. Exporter and retail stocks were leading the gains.

U.S. government-bond prices fell intraday after a report that the Trump administration is considering an interim trade deal with China, reversing previous gains that came after the European Central Bank cut its key interest rate. In recent trading, the yield on the benchmark 10-year U.S. Treasury note was 1.754%, according to Tradeweb, compared with 1.733% Wednesday.

Baader raises Dt. Industrie Reit target to 18 (12) EUR - Buy
CS raises Inditex target to 22 (21) EUR - Underperf.
CS downgrades Beiersdorf to Underperform (Neutral) - Ziel 99 (81) EUR
Warburg raises Ibu-Tec target to 22,50 (20,60) EUR - Buy

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