Global stock market party settles down for central bank reflection

Global stocks came off record highs and the euro held near a seven-week low on Thursday as investors prepared to parse minutes from the European Central Bank’s last meeting for clues to its exit from ultra-easy monetary policy.

Political tensions emanating from Spain, where one of its richest regions Catalonia has pledged to declare ‘independence in days’, was also at the forefront of concerns for European markets. 

Spain's government bond yields rose to their highest level since March while Madrid's stock market .IBEX headed for its biggest weekly loss of the year. 

Euro zone stocks .STOXXE steadied from a wobble on Wednesday, but with public holidays across Asia and some key data due from the world’s largest economy the U.S. coming up later this week, an index of global stocks flat lined .MIWD00000PUS. 

A Reuters poll showed global stocks will rise even more over the coming year as optimism about the global economy grows, but a slim majority of equity strategists polled by Reuters also said the current eight-year bull run will end in 2018. 

There were some eye-catching moves in currency markets as economic concerns at one stage knocked half a percent off the Australian dollar AUD= and the South African ZAR= rand, and investors mulled whether they had become too bullish on the European single currency EUR=.

“Much attention will be directed toward the minutes of September’s European Central Bank meeting, which could offer some fresh insight into the central banks tapering plans. The euro still remains at risk of depreciating further, if the minutes express concerns over the strength of the euro,” said Lukman Otunuga, Research Analyst at FXTM. 

The euro was broadly flat on Thursday at $1.177 EUR=, not straying too far from a seven-week low of $1.169 hit earlier this week. 

There is also plenty of uncertainty over the future path of monetary policy in the United States, with U.S. President Donald Trump promising to decide this month on a new chief to replace Janet Yellen, whose term expires in May.