On September 12, the European Central Bank made which will have a long-lasting effect on the European economy. Another news which influenced the stock markets was the U.S. President Donald Trump’s decision to postpone the tariffs.
European Central Bank and stock markets
On Thursday, the European Central bank (ECB) made the announcement. The ECB decided to reduce the main deposit level by ten basis points to -0.5%.
Another news which Analysts also expected was that ECB would introduce the stimulus package to boost the economy.
The ECB prepared a program to solve economic problems. The ECB is going to implement the quantitative easing (QE) program. According to this program, ECB will require 20 billion euros or $21.9 billion per month of net asset purchases. There is no specific timeframe when this program will end. It is up to the ECB to decide when it will terminate this program.
Mario Draghi, who is the president of the European Central Bank emphasized the importance of the role of governments. He said that they should take measures to boost the eurozone economy. Draghi will leave the ECB in less than two months. The new president Christine Lagarde will be responsible for implementing the new strategies.
The Pan-European STOXX 600 index gained after ECB made this announcement. Its index rose by 0.6%.
Stock markets and Donald Trump
U.S. President Donald Trump also made a decision which had a positive impact on the stock market. According to Trump’s decision, the U.S. will not impose an additional increase in tariffs for two weeks. Trump said he agreed not to increase the tariffs as a sign of goodwill.
Any positive news regarding the trade war is important for the stability of the stock market. The stocks of tech giant Apple increased by 0.6%. At the same time, the stocks of other U.S. companies also gained from this decision.
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