Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the first hour of trading, European markets react positively to the recent macroeconomic events in China, reflecting the measures announced by the Central Bank of China. On Saturday, this institution reduced the benchmark interest rate from 5.60% to 5.35%. Subsequently, attention will focus on the publication of the PMI index for the euro zone. The manufacturing activity measured by these indexes should continue to record positive growth at a very fragile and modest pace, although it should be noted that the measures recently announced by the ECB still only had a psychological impact among economic actors and only time will begin to introduce more material effects. During the afternoon, European markets will be influenced by the publication of economic data in the US. While the US indexes retreated a bit since then, European markets remain strong. However, with the DAX to test a long-term resistance (area of 11400) and various indicators in extreme levels, the possibility of a correction remains.
Last Friday US shares closed with contained losses in a session in which the economic agenda took center stage. The US GDP in the 4th quarter was revised down from 2.60% (originally calculated) for 2.20%. The US economic growth was negatively influenced by the decrease in inventories (which removed 0.80% to GDP growth) and the higher trade deficit (removed 1.15% to GDP growth). However, the performance of the US economy during the 4th quarter is more positive than it appears. Private consumption, which constitutes the largest share of GDP increased 4.2%, supported by improved labor market and the positive impact on the income of Americans from fuel price drop. The purchase and sale of real estate contracts reached in February the maximum of the last 18 months, contrary to the contention of signals from other indicators of this market, justified by bad weather plaguing east coast of the USA. Today, the spotlight will fall again on economic data. It is recalled that last week, Janet Yellen emphasized the growing importance of inflation on monetary policy. Today will be published the Fed’s preferred measure of inflation, the “Personal Consumption Expenditures – Price Index”, which measures the change in prices in the costs of American families, thus excluding goods consumed by business and state institutions.