3:00 PM Frankfurt – European markets were fractionally higher across the region and European Central Bank and Bank of England left key lending rate on hold. Swiss National Bank said it spent nearly $200 billion to defend the rate cap at 1.20 to one euro. French unemployment rate surge to a 13-year high and German factory orders decline.
European Central Bank left its key lending rate on hold at 0.75% and Bank of England left its rate unchanged and unrevised its bond purchase program.
Latest Italian election results are likely to complicate the ECB action as the political deadlock continues and voters reject austerity measures needed to lower government deficit and unsustainable debt.
Bank of England left its key rate at 0.5% and held its four-year bond purchase program at 375 billion pounds.
The Swiss National Bank purchased 188 billion francs or $199 billion in foreign currencies in 2012 to hold the currency cap it outlined against the euro.
The Zurich based central bank noted in a statement today that it has accumulated foreign reserves to protect the ceiling compared to 17.8 billion it purchased in foreign currencies in 2011.
The central bank imposed a limit of 1.20 franc to one euro in September 2011 to protect the Swiss economy. SNB President Thomas Jordan said central bank will defend the cap with the utmost determination” and the bank is not ready to loosen the cap for a long time as the nation avoided a recession.
In London trading, FTSE 100 index edged up 0.2% or 12 to 6,440 and in Frankfurt, the DAX index rose 0.2% or 18.6 to 7,938. In Paris, CAC 40 index added 0.4% or 15.8 to 3,790.
Market indexes in Zurich gained 0.1% and in Madrid edged up 0.56% and in Milan jumped 0.5%.
German factory orders adjusted for seasonal factors in January declined 1.9% from the revised increase of 1.1% in December. Orders declined 2.5% after adjusting for work-day calendar.
Domestic orders declined 0.6% and orders from the euro zone slumped 4.1% dragging the total export orders down to 3%.
French unemployment increased to 10.6% in the December quarter after the third quarter rate was revised to 10.2%. The final quarter jobless rate was the highest in 13 years.