Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded without major fluctuations. tomorrow’s meetings of the Bank of Japan and the Fed should impose on investors adopting a cautious stance. Therefore, today’s session will be characterized by the positioning of investors’ portfolios before the events of tomorrow. This pattern should also be observed in the bond market, which has been the main determinant of European equity indices. In terms of sectors, at an early stage of the session, oil shares may lose some of yesterday’s gains. In the Asian session, crude oil traded lower, after the Minister of Petroleum from Venezuela have said that oil production will have to decrease by 10% to match the demand, ie, to find a balance in the oil market.
American indices closed without major fluctuations. Initially, American stocks seemed to engage a recover, based on the oil strength, but the expectation in relation to tomorrow’s meeting of the Fed and the Bank of Japan prevailed. Oil traded up, favored by some factors. The first and most important is technical in nature. In recent weeks, many investors decided to sell positions in these assets and now, before the Bank of Japan meetings (BoJ) and the Fed began to reduce this exposure. In fact, if the Fed does not act together with the BoJ to make a conciliatory statement to investors, then risk assets (including oil) will appreciate in value. The second is with news from Venezuela that the OPEC countries and Russia would be available to reach a production freeze agreement. The third reason for the recovery of crude oil was the decline of the dollar despite the slight rise in State yields. The confidence of manufacturers improved in September to the highest level of the decade: its index rose to 65, up from 60 estimated. This was the highest level since 2005, a year in which the real estate market was in full expansion cycle. Out of curiosity to mention that the S & P500 has a new sector: real estate, yesterday debuted with a gain of 0.75%. Now, the index which serves as a benchmark for many investment funds consists of 11 sectors. Today, the standard session should resemble yesterday, with investors to take an expectant attitude and defensive because of the meeting tomorrow of Central Banks.
The major Asian markets ended lower, as investors await meetings of the Fed and the Bank of Japan. In Japan, after yesterday’s holiday, the Nikkei alternated the positive trend in the negative, ending the session with slight losses and with a reduced volume. Sidney stock exchange traded normally, after the technical problems in yesterday’s session, which delayed the opening and anticipated closing. The ASX200 ended with contained losses, highlighting the devaluation of the banking sector.