July 4, 2013 / 1:59 PM / 5 years ago

GLOBAL MARKETS-ECB, BoE signals send shares, bonds higher, euro falls

* ECB and BoE issue unprecedented guidance on policy outlook
    * Euro dips, sterling plunges after policy announcements
    * European shares jump more than 2 percent, FTSE soars
    * Oil eases as Egypt's president overthrown

    By Marc Jones and Richard Hubbard
    LONDON, July 4 (Reuters) - European stocks rose and the euro
fell on Thursday as the region's top central banks pledged not
to let stimulus withdrawal in the United States and renewed euro
zone tensions derail the bloc's recovery.
    The European Central Bank kept its rates at a record low of
0.5 percent and the Bank of England left UK rates unchanged,
also at 0.5 percent.  
    However, both central banks accompanied their decisions with
unprecedented guidance about the future direction of policy,
making clear any interest rate rises were a long way off.
    ECB President Mario Draghi sent the euro to a five-week low
of $1.2907 when he said rates in the currency bloc would
stay where they are for an extended period or even fall.
    "The Governing Council expects the key ECB rates to remain
at present or lower levels for an extended period of time,"
Draghi told a news conference. 
    The Bank of England, after new governor Mark Carney's first
policy meeting, earlier released a statements saying it could
take steps if the recent rise in bond yields, which came after
the U.S. central bank outlined plans to cut back its stimulus,
    Sterling fell 1.3 percent after the statement to $1.5074,
its lowest since May 29, while London's FTSE 100 rallied
sharply and was last up 2.9 percent.
    European shares rose 2.26 percent, their biggest
one-day jump for 10 weeks, helping lift MSCI's world equity
index by 0.5 percent.
    U.S. markets were closed for the Independence Day holiday
had made gains on Wednesday as investors positioned for monthly
jobs data on Friday. The numbers will be scoured for clues to
when the Federal Reserve will begin to scale back its
$85-billion-a-month stimulus programme.      
    In fixed income markets German Bund futures reversed early
losses and were sharply higher on the ECB hints about possible
future rate cuts, while yields on riskier Spanish and Italian
bonds fell.
    However, political tensions in Portugal, after the
resignation of two government ministers this week put its hope
of exiting its EU/IMF programme in doubt, hung over the region's
bond market.
    Portuguese 10-year yields, an indicator of the
cost the government would have to pay to borrow, rose back to
7.53 percent although it did not appear to have the momentum to
break back above Wednesday's high of 8.2 percent.

    In Egypt, the army overthrow of President Mohamed Mursi drew
a positive reaction from investors. The country's five-year debt
insurance costs fell 80 basis points and its stock market
gaining 7 percent. 
    With the threat of disruption in oil supplies from the
Middle East seen as having eased after events in Cairo, Brent
crude slipped to $105.32 a barrel from a two-week high.
    Other commodity markets saw limited moves before Friday's
U.S. data. The U.S. holiday limited trading in gold,
which edged down to about $1,248 an ounce, though the troubles
in  Portugal and Egypt prompted some safe-haven buying.
    Growth-attuned copper hovered near a two-week high.
    "If we get a sense that U.S. growth is not where people
think it might be yet, that could undermine the dollar and be in
general more supportive for commodity prices," said Barclays
commodities analyst Sijin Cheng.
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