European and US markets have found it tough to follow up on Friday’s bullish push, with early gains reversed as risk aversion kicked in. The beneficiaries of today’s trading are clearly the safe havens, with treasuries, gold and the yen all faring well amid a shift out of equities.
Interestingly, the risk-aversion has helped the FTSE maintain a somewhat respectable showing, with gold producers continuing to provide a boost amid rising prices for the yellow metal. That made today’s announcement from Randgold Resources fortuitous, with the producer reporting a 54% rise in full year pre-tax profit and a sixth consecutive year of record high production.
ECB President Mario Draghi struck a particularly dovish tone today, and his refusal to consider tightening monetary policy lead to a sharp move lower for the euro. The recent rise in Eurozone inflation had many wondering whether we would soon see an end to the ECB’s expansionary stance, yet by disregarding inflation as largely energy driven, Draghi has essentially promised to maintain and even extend QE for a while yet.