Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In pre-market, European shares showed modest gains. In recent days there has been a stabilization of the factors that had worried investors in recent weeks: the Chinese authorities have shown they don’t want the yuan to depreciate sharply, the Chinese stock markets stabilized and the oil price has recovered. This improvement has also contributed to diminishing fears in relation to bank stocks.
US markets closed with significant gains. The good performance of European indices and the appreciation of oil boosted US equities. In addition, the sharp rise on Wall Street in recent days has forced many fund managers to monitor this rally, applying the liquidity that had accumulated since the beginning of the year because of the turmoil experienced in the financial markets. Yesterday Oil reached gains next to 6%, with the Iranian authorities to give some opening to negotiations with the countries that agreed to the freeze on production. The Petroleum Minister welcomed Iranian envoys of Qatar and Venezuela on the agreement but to no avail if his country would join this project. Today, attention should focus again on the publication of oil reserves in the US, while investors await possible developments regarding Iran’s stance. In the macroeconomic field, yesterday’s highlight was the minutes of the last meeting of the Fed. From this event one should point out the fears of the members of its executive committee regarding the turmoil in financial markets and the weakness of many economies. Although the Fed has not changed its positive outlook on the US economy, this institution doesn’t know exactly what is the magnitude of the impact of these factors on economic activity, and proposed to review the pace of the increase in reference rates. Until last meeting, members of the Fed anticipated on average 3-4 rises in interest rates, ie between 0.75% and 1%.
Asian markets closed higher, benefiting from greater propensity to risk of global investors. Among the various markets, stood out Sydney, given its exposure to the oil and mining sectors. In Shanghai, the local index closed with very contained losses.