Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, European shares opened slightly lower. Yesterday, European investors concentrated on the more positive effects of the statements of Janet Yellen, relegating to the background the positive impact it had on the Euro. In recent months, the negative correlation between the euro and the main European indices (especially the DAX) has been particularly high. Thus, if the EUR / USD approach to the level of 1.14 it can exert a downward pressure on European markets. The publication of inflation in the euro zone may not have a significant impact on the course of the session but should provide important clues regarding the efforts of the ECB to generate pressure on prices in order to achieve their target (2%). Economists estimate that February inflation has increased slightly from -0.20% to 0%. If we exclude the most volatile goods, inflation is expected to have reached 1%. Weighing on inflation of the euro zone has been the fall in fuel prices, the modest economic recovery and still faltering consumer confidence in most European countries.
American indices closed higher in the aftermath of the last intervention of Janet Yellen. The President of the Fed pulled back the specter of a rate hike in April and decreased the likelihood of an increase in June. In the long run, the two variables that most influence the stock markets are interest rates and corporate profits. This second variable is, briefly, the main topic on Wall Street when companies begin to report their quarterly accounts. Thus, the risk propensity of investors lasted during the session, which favored more cyclical stocks, including technology, although in the final phase of day this propensity has decreased. After reaching gains of more than 2%, crude oil fell ending the day with a gain of only 0.10%. In the last two weeks it has been visible the difficulty of oil (quoted in New York) to remain above the zone of 40 USD. In the macroeconomic field, according to the ADP report, the private sector created 200,000 jobs in March, a slightly higher number then the forecasted of 194,000. This reading could lead some economists to revise upwards their estimates for the publication of official employment report, scheduled for Friday. Tomorrow begins a period that is seasonally negative for US equities. Until April 15th, the Americans will have to pay their IRS and many resort to the sale of shares and redemption of investment funds to finance this charge. Over the past 20 years, from the beginning of the month until that day, US markets were only able to achieve a positive return in only 30% of the time. This is only an empirical data, so it does not mean that US indexes will repeat this pattern this year. The important thing to remember is that in the next two weeks we shall able to attend to some selling pressure.
Asian markets closed without major fluctuations, partly due to expectations regarding the publication of the US employment report. In Japan, the Nikkei continued to present an underperformance compared to its Asian peers due to the devaluation of the Dollar against the Yen.