Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European shares traded with some gains. The session will be influenced by the evolution of the Euro (which continues to trade close to 1.14), oil (which recorded some gains in Asia) and the Wall Street behavior. Today will start in Cernobbio (Italy), the Ambrosetti Forum, an annual event that brings together diverse personalities of the financial and business world, as the ECB Yves Mersch member, the Italian Minister of Finance Carlo Padoan, the CEO of Unicredit, among others. This type of event is always a chance to probe the feelings and perspectives of some of the main global economic actors.
American indices closed lower, due to the weakness of oil and correction of financial and technological sectors. Oil lost some of the gains made the previous day (-1.40%) due to the profit taking by short-term investors and the uncertainty surrounding the plan of Saudi Arabia and other countries to freeze current production levels. At the sectoral level it stood out the weakness of technological sectors (more precisely biotechnology) and financial. But if the correction of the first is due almost exclusively to the realization of profit taking (up nearly 14% over the past two weeks), the weakness of the financial sector is more fundamental. This sector has been penalized by the reduced differential between short-term interest rates (at which banks fund themselves) and long term (which serve as a reference to the assigned credit), the increase in non-performing loans (mainly oil companies) by increasing regulation and the fall in trading revenues. At the macroeconomic level, the number of weekly applications for unemployment benefits declined last week in 9000 to 267,000, below the 270,000 anticipated by economists. Today, attention will focus on the ability of American indices react to yesterday falls and the interventions of several members of the Fed, because today are scheduled interventions of Governors of the districts of New-York Fed, Dallas and Philadelphia.
Asian markets closed lower, due to the drop of European and American indices. The only exception was the Nikkei which ended with gains close to 1%. Boosting Japanese stock market were the comments of the Minister of Finance whom indicated that his government is ready to catch the recent appreciation of the yen. However, is beginning to emerge in Asian markets fears regarding the impending expiration of the temporary restriction in China to the selling of shares by the major shareholders of domestic companies, which could trigger the market selling pressure. In fact, last January 7 (but with effect only from the 9th of the month), the Chinese authorities imposed the ban for 3 months to the selling of shares to shareholders with more than 1% of the capital of a company, not having specified the date of such termination. These fears fundamentally arose after a large company admitted to trading in Shenzhen, have communicated to the market details of the selling plans of one of its largest shareholders which so far was restricted to sell shares.