Markets subdued ahead of Draghi briefing

By Pan Pylas

Associated Press

Published: Thursday, Oct. 4 2012 4:05 a.m. MDT

FILE-In a Friday, Aug. 31, 2012, file photo, a trader works on the floor of the New York Stock Exchange, in New York. Markets were subdued Wednesday Oct. 3, 2012 as investors awaited a run of U.S. economic figures.

Jason DeCrow, File, Associated Press

Enlarge photo»

LONDON — Financial markets remained subdued Thursday in the run-up to the monthly policy meeting of the European Central Bank and another round of U.S. economic data.

For most of this week, markets have been fairly leaden-footed as investors awaited these European and U.S. developments.

Though the ECB is not expected to reduce its main interest rate from the current record low of 0.75 percent or announce fresh anti-crisis measures, investors will still be keen to hear what the central bank's president Mario Draghi says about the economic outlook and whether will take up the bank's offer to help lower its borrowing costs.

"Investors will be meticulously analyzing any indications ... as to whether Spain is actually any closer to requesting a bailout," said Shavaz Dhalla, financial trader at Spreadex.

Investors think Spain will ask for help from the ECB to keep a lid on its borrowing costs, but the delay in any request has unnerved some and the yield on the country's 10-year bond has edged up Thursday to 5.83 percent.

Stocks across Europe were also marginally lower ahead of Draghi's press conference, which is being held in Slovenia, one of the euro's 17 countries.

Germany's DAX was down 0.4 percent at 7,294 while the CAC-40 in France fell the same rate to 3,391. The FTSE 100 index of leading British shares was 0.3 percent lower at 5,806.

Wall Street was poised for a moderately positive open, with both Dow futures and the broader S&P 500 futures up 0.2 percent. How they actually perform could hinge on both what Draghi says and on weekly jobless claims figures, which will be released a day ahead of the monthly nonfarm payrolls report from the U.S. government.

"Tomorrow's nonfarm payrolls are likely to be seen as the major event of the week for many investors," said Fawad Razaqzada, market strategist at GFT Markets. "Given the combination of low volumes and limited price action, many may simply elect to sit on their hands until then."

Draghi and the U.S. data are also containing activity in other markets. The euro was barely higher at $1.2939 while the benchmark New York oil price was up 28 cents at $88.42 a barrel. The oil price fell $3.75, or 4.1 percent, on Wednesday, its biggest decline since May 4 amid concerns over the global economy.

Earlier in Asia, Japan's Nikkei 225 rose 0.9 percent to close at 8,824.59 while Hong Kong's Hang Seng rose nearly 0.1 percent to 20,907.95. Chinese markets remained on holiday.

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