The European indexes opened up, a day after they have presented a significant increase in their valuation. Yesterday’s behavior was due to the statement of the US Federal Reserve made the day before. European markets continue to be positively influenced by American indexes but the situation in Greece and Russia as well as the evolution of oil will continue to haunt investor sentiment.
Today is expiration date for futures contracts and options on European indexes. Generally, the expiration days of futures and options are more volatile and likely to be performing erratic movements. The most critical periods are the interval between 10h50 and 11h00 (for futures and options on the Eurostoxx50) and 12h00 (for futures and options on the DAX).
“Do not fight the Fed!”. This old Wall Street aphorism advises investors not contradict the Federal Reserve. In fact the echo of the statement from the Federal Reserve was felt in yesterday’s session, with major stock indexes registering gains of more than 2%. Monetary policy has been the most important variable to influence the course of the stock markets in recent years. In addition to not having removed the words “for a considerable period of time”, the Fed reported that the interest rates should not suffer increases before mid-2015, removing the uncertainties that the market had in relation to its timing.
Leading indicators of the economy, anticipating their cycles in 6-9 months increased 0.60% in November, foreseeing a dynamic economy in the coming months.
In US markets, the session will also be influenced by the expiration date of futures and options, which should be reflected in an increase in volatility. The most critical moments are the opening and 19h00.
Japan’s Central Bank maintained its strong stimulus and presented more encouraging outlook for the country’s economy.