The steady drip-feed of global stimulus also kept world shares
inching towards an all-time high as another record close for Wall
Street and a three-year high for Asia left them heading for a fifth
day of back-to-back gains.
European stocks were happy to take a breather in early trading after
gaining almost 10 percent in the last few months, leaving the
momentum from last week's ECB cut in interest rates to continue
The rate banks in the euro zone charge one another to borrow
overnight - known as EONIA - hit an all-time low at a
just-above-zero 0.053 percent, in a move the ECB hopes will feed
through to firms and consumers and boost growth.
The euro was pinned near a four-month low against the dollar at
$1.3596, while there was a new all-time low for Portuguese bond
yields, a proxy of its borrowing costs, just three years after it
needed an EU/IMF bailout.
"Broadly what the ECB has done has been pro-risk," said Alvin Tan, a
currency strategist at Societe Generale in London.
"Quite apart from the currency moves we have seen, volatility is
just plunging and that is all part of the story."
The global appetite for riskier assets has also been whetted by last
week's upbeat U.S. non-farm payrolls jobs report.
On Wall Street overnight the S&P 500 ended at a fourth straight
record closing high and the Dow .DJI at its third.
Aside from the ECB's recent bold moves, there was other reassuring
news from the euro zone on Tuesday too.
Italian industrial output rebounded more than expected in April,
though France's recovery, which is lagging that of its euro zone
peers, only marginally improved in the second quarter according to
its central bank.
In Asia, there was muted market reaction to Chinese inflation data
as it remained well within the government's comfort zone, giving
room for the government to launch fresh stimulus measures if needed
to support the economy.
China's consumer prices rose 2.5 percent in May from a year earlier
while producer prices fell 1.4 percent.
"No surprises again from May inflation data. Producer prices
stabilised ... pointing to muted inflationary pressure," said Andy
Ji, senior Asian currency strategist at Commonwealth Bank of
Australia in Singapore.
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MSCI's broadest index of Asia-Pacific shares outside Japan was up
0.6 percent as trading in the region wound down, leaving it at its
highest since June 2011.
Australian shares rose 0.1 percent, but Tokyo's Nikkei and India
main stock market bucked the trend as investors cashed in on some of
the sizeable gains both have seen recently.
The dollar continued to benefit from rising U.S. Treasury yields.
The dollar index, which measures the greenback's strength against a
basket of key currencies, held steady after rising 0.2 percent on
On the day, the dollar stood slightly lower at 102.25 yen. The euro
was also flat at $1.3587, while the higher yielding Australian
dollar hovered near a six-month high against the euro as hungry
investors piled into carry trades.
In commodities, copper steadied after worries about a Chinese probe
into metals financing pushed prices to one-month lows in the
Three-month copper on the London Metal Exchange rose 0.1 percent to
$6,680 a tonne from the previous session when it dropped to $6,636 a
tonne, its weakest since early May.
Brent crude gained 2 cents to $110.01 a barrel, building on the
previous session's sharp 1.3 percent rise made on strong U.S. jobs
and improved Chinese export data.
(Reporting by Marc Jones; Editing by Gareth Jones)
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