In This Article:
* Europe waits for ECB to signal liftoff on first rate rise
* Yen hits 20-year low against dollar
* China shares stumble as Shanghai sees new COVID-19 curbs
* Oil holds at about $123 a barrel
* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
*
By Marc Jones
LONDON, June 9 (Reuters) - Investors buckled up on Thursday for the European Central Bank’s signal that it is ready to raise interest rates for the first time in a decade, while the yen weakened to a new 20-year low on bets the Bank of Japan will lag way behind.
There was little else worth focusing on. How fast the ECB will now lift the euro zone's sub-zero borrowing costs has dominated markets for months, coming as part of the most widespread tightening of global monetary policy in decades.
Bond dealers marked the moment by pushing Germany's 10-year government bond yield - the main proxy for European borrowing rates - to its highest level in nearly eight years. Stocks steadied after an early 1% slip. The euro barely budged.
With euro zone inflation at a record-high 8.1% and broadening quickly, the ECB has already flagged a series of moves, including also ending its long-running asset buying programme at the end of this month. Details will be crucial though.
Economists wonder whether it might risk its first half-point rise in 22 years when its starts the hiking process, most likely next month. There has also been speculation it will try to protect former debt crisis countries where borrowing costs have been veering up faster again.
"The bar has been set pretty high by the drum beat of recent comments (from top ECB policymakers)," said Saxo Bank's head of head of FX strategy John Hardy, referring to signals that rates will start rising next month, possibly by a meaty 50 bps.
"So it is about A) do they clear that bar, and B) how does market react.... I don't think they (ECB) will want to take anything off the table."
Small but broad-based losses in European stocks were led by miners as China imposed new COVID lockdown measures in Shanghai, while the financials sector was the sole gainer on hopes banks will soon be able to charge higher lending rates.
Asian stocks had fallen overnight and Wall Street futures were flat, although it was more to do with the renewed rise in both global bond yields and the dollar, that will ultimately mean tighter financial conditions.
MSCI's broadest index of Asia-Pacific shares outside Japan was closing down 0.65%, with Australian shares down 1.2% and Seoul's KOSPI 0.5% lower. Hong Kong's Hang Seng turned around from small gains to fall 0.75% and Chinese A-shares fell 1%