Markets were busy overnight with iron ore slumping below $US60 per tonne, the Australian dollar dropping back towards the level seen prior to the Reserve Bank of Australia's decision to hold rates and European markets were buoyed by its own central bank's outlook and plans to buy €60 billion of bonds per month starting next week.
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The price of iron ore, measured for immediate delivery out of the port of Qingdao in China, hit a new six-year low overnight on Thursday, falling 3.6 per cent to $US59.73 per tonne, according to Metal Bulletin.
Since its 2014 peak, iron ore has more than halved in value. From its record high of $US191.70, reached in February 2011, it has plummeted nearly 70 per cent.
The fall in the price of iron ore overnight came as China lowered its growth target to around 7 per cent in 2015, down from 7.5 per cent which it narrowly missed in 2014. China's 2015 growth target is the lowest in 15 years.
The Australian dollar was also impacted by the fall in iron ore overnight and the lowering of China's growth target. After spiking on Thursday following comments from RBA deputy governor Phillip Lowe who said the dollar was still too high, the Aussie fell from around US78.21¢ in late trade on Thursday to US77.60¢.
"While it has no consistent daily relationship with the Aussie [and iron ore], moves such as this will only reinforce the RBA's view that lower terms of trade will very likely require a lower AUD," NAB analysts said.
Also in currency markets overnight, the US dollar hit a fresh 11-year high against the euro, $US1.10988, following the European Central Bank's announcement. The Australian dollar was little moved against the euro, sitting at 70.48 euro cents.
The ECB painted a relatively rosy picture of the outlook for Europe over the next few years, while announcing its quantitative easing programming, which will see it buy €60 billion of bonds per month starting Monday.
Sharemarkets were unsurprisingly happy with the result. The Eurostoxx 50, Germany's DAX and France's CAC all jumped nearly 1 per cent. London's FTSE100 lifted 0.6 per cent.
The ECB is forecasting growth to rise by 1.5 per cent this year, 1.9 per cent in 2016 and 2.1 per cent in 2017. Inflation is expected to be flat in 2016 and jump up to 1.5 per cent next year.
"It is possible that the ECB may feel that much of the anticipated response to its policy announcements has already been achieved," ANZ global head of economics Brian Martin said.
"Only time will tell if that is the case but the ECB feels that there is no reason to believe it will have to adjust the announced EUR60bn per month outright purchases."
On Wall Street, markets were broadly higher, while locally, SPI futures are flat.
