Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices showed some gains. The beginning of the session will be marked by reduced volume due to the lack of news and the contained variations recorded by American and Asian indices. The rise of crude oil in Asian markets should give some momentum to the recent recovery of the oil sector. The mining sector, due to the high correlation with oil shares should follow this hypothetical rise. However, the key element of the rally of European markets is the banking sector. With a view to medium term, the rise in recent weeks significantly improved the technical sector panorama. In the short term, however, the rise reached extreme levels and there may be a correction but that does not invalidate the medium-term trend. Despite these technical improvements is at the fundamental level that depends the future of the banking sector. European banks have to find and implement a new paradigm in the context of low interest rates, increased regulation and economic growth lower than the historical average.
US markets closed with modest gains, but that was enough for the Nasdaq reaching a new high. The session was marked by an initial negative reaction to the publication of the ISM index for services, which was later followed by a slow recovery that lasted until the end of the day. In August, the ISM index for services has undergone a sharp and unexpected drop, decreased from 55.5 to 51.4. This was the lowest reading since 2010. The joint fall of the ISM manufacturing activity and the ISM services generated some concern among investors. The recovery that followed the negative reaction to the ISM index was founded on the good performance of biotechnology and oil shares. Oil traded up, allowing the respective sector reach 1.50% gains.
The major Asian indices did not show a common trend. The Japanese stock market in recent weeks has been one of the best performers but today was penalized by the appreciation of the yen, which pressured shares of exporters in the country. Today will be published foreign exchange reserves of China. The Yuan negotiate the lowest of the last six years against the dollar. The level of foreign exchange reserves of China has a high importance because they reflect the central bank’s ability to control the movements of its currency.