Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European markets were traded with contained losses. The evolution of oil prices will continue to influence investor sentiment. In the Asian session, crude traded with modest gains (about 0.40%). Oil continues to be shaken by evidence that supply is accelerating at a pace considerably higher than demand, a factor being exploited by a myriad of hedge funds. During the Asian session news surfaced that Nigerian production is expected to hit the highest of the last 17 months in August. Another sector that has shown some fragility is banking. In the last two weeks DJStoxx Banks lost about 4%. In fact, the difference between 30 and 5 years German and French interest rates reached the low of this year. This movement is explained by the decline in inflation prospects in Europe (partly helped by the decline in oil prices), the lower long-term debt issuance by countries such as France and Italy, by the ECB’s purchase of bonds and by the decline Of US yields. At the macroeconomic level, the final readings of the PMI (Purchasing Managers Index) activity indexes will be published, which should confirm the dynamism of the Euro Zone economy although its impact during the session should be limited.
The American markets closed without major fluctuations. Although oil remains the central theme of the week, it was the pharmaceutical sector that came to stand out. Congress is discussing a new health care bill that will replace Obamacare. Within the pharmaceutical sector, the actions that most aroused the enthusiasm of the investors were those of biotechnologies. According to rumors in Washington yesterday, President Trump, who has always been quite critical of the pricing policy of biotech companies, may be preparing more conciliatory legislation for this sector. Oil traded volatility ranging from sharp losses to significant gains. Although the oil sector represents just over 6% of the S & P500, crude oil has the capacity to condition investor sentiment as it influences a number of variables. Attention will now be focused on the behavior of oil and developments in Washington regarding the discussion of the new health system law.
Asian markets closed without major fluctuations due to the uncertainty that marked the American and European sessions. The exception was the Chinese market which recorded losses close to 1%. In Shanghai and Shenzhen rumors have circulated that the authorities will investigate the role of banks in the merger and acquisition processes of recent years.