Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening European markets showed some gains, justified by the good performance of Wall Street. Despite the attention of investors are focused on tomorrow’s ECB meeting, the geopolitical risk is a constant threat. Yesterday in the afternoon it was reported that a bomb exploded at the Istanbul metro and in Sofia airport had been found a car with a handmade bomb. Although at the time it was not known whether the nature of these attacks was associated with the Islamic State, it was enough to European markets to drop more than 1% after the news release. At this stage, the attacks follow one another and in several countries (France, Lebanon, Turkey, Egypt, etc.), so the front of terrorism is much broader than in previous years events. At the macroeconomic level, the publication of the consumer price index may help investors to adjust their expectations for the ECB meeting, although they are aware that it will not be conditioning the decision of the Central Bank.
American indices closed higher, boosted by some consumption data and seasonal factors. Yesterday were published Cyber Monday sales that surprised by the positive. Given the same Monday last year, online sales grew 16%, a growth rate higher than the 12% estimated. This variation reassure many investors who had been concerned about the disappointing sales in stores and shopping centers. Another variable that inspired buyers is that December is traditionally a positive month for equities. Generally, the pattern of this month is characterized by an initial rise during the first week, followed by a correction and a rally at the end of the month. These factors overlapped to the unexpected drop in the ISM. The ISM index, which measures manufacturing activity and is one of the tools used by economists, suffered a sharp drop in November, declining from 50.1 to 48.6, signaling that the US industry is in a contraction phase. On the positive side, the employment component increased from 47.6 to 51.3. Alone, this figure is not alarming, because it may be due to seasonal factors. However, the publication of the ISM on the same day in which the PMI indices indicate that the Chinese industry is also shrinking, is enough to generate some concern among investors. Investment in construction increased by 1% in October, exceeding the forecast of 0.50%. Today macroeconomic issues shall overlap the other themes. The release of the ADP report, which measures job creation in the private sector, should have a limited impact on the session trend, due to its low correlation with the official employment report, to be published on Friday. On the other hand it is unlikely that this indicator as others to be published this week (with the exception of official employment report) influence the Fed. So the top of the meeting point will be the participation of Janet Yellen in the conference organized by the Economic Club of Washington (16:00).
Asian markets closed without major fluctuations, with the exception of the Shanghai Stock Exchange. This market was boosted by rumors that the government will lower taxes on mortgage loans.