Stocks Rise On Japanese GDP |
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| By: Josh Baskin | ||||
Equities Increase On Japan GDP Equity Futures: Dow +62.00. S&P +8.20. NASDAQ +8.75. Japanese Nikkei +32.00. German Dax +11.00. European Trade: European markets began the Monday trading session with very sturdy momentum, following the much better than anticipated Japanese GDP statement and APEC’s pledge to sustain the fiscal stimulus. The confidence seen in Asian trade, where the markets inverted early losses, allowed a risk aversion wave to sweep into the overnight session. European stock markets saw clear momentum from the opening bell. All area stock markets are currently trading in the green, with the gainers is led by Norway’s OBX, which grew 2.20%. The heavyweight German Dax and U.K. FTSE improved around 1% in Monday trade, while in Emerging Europe, Poland’s Wig Index gained 2.10%. The European stock market was pushed higher on the reverse of Asian market momentum that followed very strong Japanese GDP numbers. In the third quarter, the Japanese nation expanded 1.2%, beating market’s expectations of a 0.7% read. The increase rate of the Japanese economy is stronger than the one seen in Europe or U.S., even though the market had been pricing in a unhurried Japanese recovery. Further optimistic momentum came from the Asia-Pacific Economic Cooperation (APEC) gathering, where the most important economies in the Asian region vowed to continue the stimulus programs, echoing the G20’s assertion made earlier this month. Sector Moves: The vast majority of the gains in European trade came from the basic materials sector, which surged 3% after gold achieved a new record high during the session. This was reflected in the U.K.’s FTSE, where miners have a fundamental weighting in the market. As such, the six most excellent gainers in the FTSE 100 index came from the mining sector, with Lonmin jumping 7.85%. Also in the U.K. index, Rolls-Royce jumped 3.20% after it managed to secure a £1.5 billion pound contract with Air China. Since the launch of the year Rolls-Royce has always returned higher yields than the FTSE index. In the German Dax, ThyssenKrupp advanced 3.0%, being the subsequent best gainer in the index after Infineon. ThyssenKrupp increased after it was upgraded by JPMogan to “overweight”. Economic Moves: The only notable macroeconomic report seen during the European session was the euro-area CPI, which came in at a -0.1% read from one year earlier. Ahead, investors prepare for the U.S. retail sales numbers and for the Empire State Manufacturing Index, which will probably have an important impact on the market. Both reports are scheduled at 08:30 EST. Crude oil was a short time ago trading at $77.35 per barrel, higher by $1.00. Currency Pair Overview: Positive Equities, And The Dollar Holds On In general, after a encouraging Asian equity trading session, in which the dollar index was pushed to a new low, the currency market started retracing right through the morning European trade. Interestingly, this is occuring on a day that equity markets are trading deep in the green, something that does not occur very often. The latest pattern has been that equity markets trade higher, which pulls the dollar down. Over the last two weeks of trading the currency market saw a general lack of momentum and volume, which frequently appears near the end of an uptrend, signaling that the market needs a short-term retracement of the dollar selling. The currency market is trading in an overbought situation in opposition to the dollar. The euro (Eur/Usd 1.4960) rose up to the 1.5000 area during the Asian session, but shortly after the pair started to retrace the pips gained previous in the session. Right now, the euro is trading in the 1.4960 area, just above TheLFB Resistance 1. During the European session, the market absorbed Euro-zone CPI numbers, but they had little effect. The pound (Gbp/Usd 1.6670) tested the 1.6740 area during the European session, but failed to break higher. In this level, the pair met a resistance trend-line that has held for nearly a week. In order to develop its current uptrend, it is necessary for the pound to move above this price-point. To the downside, the 1.6600 area might act as an significant swing point. The aussie (Aud/Usd 0.9325) had a range of only 35-pips since the day started, even though the other major pairs saw higher momentum. Over the current periods of trade, the aussie has moved on feeble momentum, something that might be interpreted as pessimistic in the short to medium term. The cad (Usd/Cad 1.0480) is presently trading beneath TheLFB Support 1 area (1.0465), after the pair declined about 50 pips on the day. On the daily chart, the cad is trading below the vital moving averages, but the trading volumes have been in a perpetual decline lately. The swissy (Usd/Chf 1.0090) continues to tease the 1.0050 area, but once again has failed to push lower during the overnight session. A break underneath this level will come only on encouraging equity markets and broad dollar weakness, something that has yet to happen. The yen (Usd/Jpy 89.45) spent the overnight session consolidating in the 89.50 area, which is the lowest cost it touched in a month. A break below this price point will most likely lead the yen towards the 88.50 and then towards the 87.00 areas. |
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| Article Source: http://yourfinance.co.za | ||||
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