Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets shrink after the opening of the session, following the Wall Street trend. As we know, there are signs that point that European markets reached extreme levels. However, only when the DAX (who has served as benchmark for European markets) close below 11800, the short-term trend could be reversed. A possible correction of short-term European indexes does not compromise the positive environment that has marked the stock market year of 2015. One of the factors that may cause a decline in European markets is a recovery of the Euro. Today, the publication of the confidence index of German business can influence the course of the European currency.
The American stock market indexes closed lower, partly due to the consequences of the economic data released yesterday. According to the Department of Employment, inflation, measured by the consumer price index grew 0.20% in February, comparing to the previous month, reversing its three months of declines. Contributing to the increase in prices was essentially the rise in gasoline prices. Leaving aside the more volatile items (such as fuel and food), inflation rose 0.20% in February. In annual terms, the price level increased by 1.70%, slightly lower than the 2% recommended by the FED. Sales of new homes increased 7.80% in February, reaching 539,000 units (annualized number), comfortably exceeding the forecast of 465,000 estimated. This deviation was possible mainly due to the strong increase in sales in the Northeast United States (+ 153%), which in January had been penalized by the bad weather that hit this part of the country. These data recalled that while the Fed has shown little inclination to increase interest rates in the coming months, this position depends on the evolution of economic indicators. On the other hand, yesterday data stopped the recent correction of the dollar. The rise of the dollar in recent months has led many analysts to revise downward the estimated profits of US companies for the 1st quarter. Today the agenda of the FED includes the participation of the Chicago Fed Governor at an event in London at 10:30 (GMT).