Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
The Market is recovering from yesterday’s losses. Although Wall Street has prolonged the correction after the European close, European equities, show some resilience based on losses contained in the Asian markets and the favorable climate that has involved the European markets. Today initiate negotiations between the Greek authorities and technical EU / IMF / ECB on the measures that will be implemented in the country. The European indexes will remain very attentive and sensitive to any rumors or news from Athens. Also today, the ECB will hold its annual conference, where the debt purchase program is undoubtedly a major topic as well as the economic outlook in the Euro Zone.
US shares closed yesterday with sharp losses. The main cause for the drop is the concern that the Fed may raise interest rates sooner than anticipated last week. The key event that changed the perspective of investors was the employment report, which described a very dynamic labor market. The prospects of a rise in interest rates in the US also influences the equity markets through the foreign exchange market. A pattern that starts creating some concern among investors is the rise of the dollar. About 20% of the revenues of the constituent companies of the S & P is generated outside the US. Thus, the appreciation of the dollar decrease the value of revenues and profits in foreign markets as reduces the competitiveness of the products of American multinationals. Thus, when the dollar reaches extreme values, the correlation between this currency and the US indexes becomes negative. Today, the Fed will publish the second round of stress tests that assess how banks manage risk and its ability to increase the shareholder remuneration programs, such as the distribution of dividends and the repurchase of own shares.