ETF Trends
ETF Trends

Exchange traded funds were volatile before Thursday’s opening bell as the European Central Bank cut rates and announced liquidity measures designed to help banks.

ETFs pegged to U.S. stocks, the euro and precious metals jumped after the ECB lowered reserve ratio requirements for lenders and also eased collateral restrictions.

However, the ETFs swung in the opposite direction after ECB President Mario Draghi at a press conference said there may not be more rate cuts and bond buying in the future.

SPDR S&P 500 (NYSEArca: SPY) slipped 0.6% in premarket trading while CurrencyShares Euro Trust (NYSEArca: FXE) also traded lower.

Precious metals ETFs initially soared in the wake of the ECB news as the dollar weakened, but then pulled back on the Draghi comments.

The iShares Silver Trust (NYSEArca: SLV) was fractionally positive before the bell while SPDR Gold Shares (NYSEArca: GLD) traded lower.

Markets should continue to be volatile to end the week as investors await the outcome of the European summit and look for any additional measures to combat the debt crisis.

CurrencyShares Euro Trust

Full disclosure: Tom Lydon’s clients own GLD, SLV and SPY.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.