Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European indexes traded lower, reflecting the loss of momentum seen on Wall Street after the European closing on Friday. Last week, it was expected an increase in volatility, which became to materialize as a result of the increasing volatility since 3 weeks in the bond market, foreign exchange and commodities markets. Tendentiously, increased volatility translates into greater uncertainty in the markets and consequently a greater nervousness of investors. In this context, it is important to analyze what is the position of savers worldwide. In the last 5 weeks, we have seen some redemption of shareholders funds. These redemptions were more evident in specialized funds in European equities, which have suffered redemptions, consecutively in the last 36 weeks. Conversely, funds specialized in Japanese equities continue to attract the interest of private investors. The preferred assets of savers have been the bond funds, especially those exposed to emerging market debt.
US markets closed without major fluctuations, after a promising start in the session. At first, the good results of the banking sector and the positive signals for retail sales led to significant gains. Subsequently, the weakness of biotechnology shares and interestingly the statements of members of the Fed triggered a reversal of this early trend. Retail sales increased 0.60% in September, a higher increase than 0.40% anticipated by economists. August was revised upwards, with a lower decline than initially calculated (-0.20% vs -0.30%). If excluded the most volatile goods, retail sales grew only 0.10%, less than the forecast of 0.40% . The growth of total retail sales in September relaunch the positive momentum that private consumption recorded in the 2nd quarter and had been interrupted during the months of July and August. On the other hand, the Reuters/Michigan Consumer Sentiment Index reached 87.9, falling short of the 91.50 expected, partly due to the uncertainty associated with the presidential elections. The results of the banking sector, published on Friday, were entirely good and managed to alienate some fears caused by Alcoa and Ericsson. The President of the Fed argued that the central bank can tolerate a higher than desired inflation to ensure that the economic expansion continues to solidify. Today, the Vice President Stanley Fisher will be present at a conference organized by the Economic Club of New-York. Of the three main members of the Fed (Janet Yellen, Stanley Fisher and William Dudley), the Vice-President has been one that has shown more inclined to a rise in interest rates in December.
Asian markets closed without a common trend, in a little volatile session. While Chinese and Australian markets closed down, the Tokyo and Seoul exchange markets reflected the depreciation of their currencies against the dollar, which benefits their export sectors.