Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded with some gains. This positive start is based on decisions taken yesterday by the Fed and the slight decline in European yields at the opening of the bond market. In a context marked by the decisions of the central banks, it is important to monitor the intervention of Mario Draghi at a conference organized by the European Systemic Risk Board, over which he presides. It is not excluded that during his speech, Mario Draghi make nod to the European banking system situation and possibly the future of monetary policy in the eurozone. In the short term, European equities should continue to be influenced by the EU yields (which will be conditioned not only by the words of Mario Draghi as well as the development of their American and Japanese counterparts) and to a lesser extent by the behavior of oil. This raw material should take a more volatile pattern with the approach of OPEC’s meeting next week.
American indices closed up, with the Fed matching the expectations that investors had been forming in recent sessions. The Central Bank left interest rates unchanged in the range 0.25% to 0.50%. The Fed acknowledged that the economy continues to expand but not fast enough to justify an immediate rise in reference rates. Most members of the Fed also estimate a rise in interest rates in 2016, while three believe they will remain unaffected. For 2017, the majority of the members of the executive committee believes should occur two increases of 0.25%. During this year, there has been a profound divergence between the expectations of the Fed and the market. In early 2016, the majority of the Central Bank estimated that during the year interest rates to increase 4 times, rather than the market pointed: at most one increment. After 9 months, the Fed sharply reduced their projections, while the market remained firm in their projections, which for now have been quite realistic. Concluded the meetings in September from the Fed, the ECB and the Bank of Japan, the importance of central banks does not diminish but investors will now be able to divert some of their attention to next week’s meeting of OPEC and the earnings season that starts in October.
Asian markets closed with modest gains reflecting the decisions taken by the Fed yesterday. The Japanese market was closed, for the celebration of the Autumn Equinox.