Market Analysis

European shares are gaining despite a patchy trading session

EUROPEAN SHARES 
European shares are gaining on Tuesday, despite a patchy trading session overnight in Asia where market sentiment remains uncertain due to the fast spread of the Omicron variant in the region. Elsewhere markets fluctuated, paring yesterday’s losses as dip buyers seized the occasion of interesting entry points brought by Monday’s bearish price actions. In Europe, both the Euro and the EU Bund are trading sideways today, providing an interesting setup for stock traders ahead of new comments from ECB president Christine Lagarde due later this morning. In addition, stock investors are also likely to pay attention to what will happen on the other side of the Atlantic with today’s hearing from Fed chairman Jerome Powell in the Senate Banking Committee as well as further comments from other Fed officials, ahead of tomorrow’s highly awaited US CPI report.

Technically speaking, EU benchmarks remain well oriented as major support levels continue to prevent the market dipping lower. The DAX-40 index continues its sharp rebound over the 15,820 zone, with the 16,000 pts mark as a first target.

Pierre Veyret– Technical analyst, ActivTrades

 

Source: ActivTrader

 

FOREX

The US dollar is stalling, with the index that measures its performance in relation to other major currencies slightly down during early Tuesday trading. Despite the rise in treasury yields, which saw the 10-year note climbing above 1.8% overnight, the dollar remained subdued, with investors awaiting the testimony of Fed chairman, Jerome Powell, to the US Senate later today. The markets were quick to price-in the Fed’s shift to a more hawkish stance back in November, with three rate hikes in 2022 now firmly baked into the value of the greenback. Investors are now sitting tight, awaiting further clues; should Powell give any hint of an even more aggressive desire to tighten by the US Central bank, which could entail a rate hike in March, rather than in June, and faster unwinding of its balance sheet, then we can expect a more bullish US dollar, potentially challenging the November maximums.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

Source: ActivTrader

 

OIL 
WTI crude Oil prices are climbing during early Tuesday trading, amidst tight supply and increased risk appetite in global markets. Some OPEC+ countries are failing to fulfil the agreed increases in supply quotas, while the geopolitical instability, generated by the aggressive stance of Russia towards Ukraine, is also a cause for concern. On the other hand, despite the sharp increase in the numbers of Omicron infections, the disease caused by the new variant of the virus seems to be less severe and so far none of the world’s larger economies appears inclined to impose the type of strict lockdowns that could dent demand. In this scenario it is fair to say that the outlook for oil prices remains bullish.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

Source: ActivTrader

 

 

The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.

All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.

Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.