Market Analysis

European shares resumed their upward trend

How are the markets reacting after the ECB's decision?

FOREX

The dollar is almost flat against other major currencies during early Wednesday trading. The greenback’s recent dynamic has to a large extent been dictated by oscillations in the bond market, where treasury yields have fluctuated according to how fearful investors feel about the prospect of returning inflation. Yesterday’s successful auction of 3-year notes appears to have calmed the waters, with yields stabilizing and having a similar effect on the dollar. Later today there’ll be another large auction of 10-year treasury notes, where if the demand remains high it could create scope for further dollar weakness.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES 
European shares resumed their upward trend, despite initially opening down, as investors’ risk appetite remains alive and well. Even if a rotation from growth to “defensive” shares is still taking place, the global market sentiment is still oriented towards riskier assets this week. Indeed, with today’s signature on the $1.9 trillion stimulus package from President Biden and the acceleration of the vaccination process in many hotspots, it’s hard to find any reason to be bearish at the moment. However, many traders are awaiting today’s US CPI release where an increase is clearly expected, while energy stock traders will pay a close attention to crude oil inventories data which could bring further market volatility towards miners, cyclical values and carmakers.

Technically speaking, the Stoxx-50 Index has cleared its major resistance at 3,795-3,800pts, opening the way to upper targets at 3,835pts and 3,900pts.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader

 

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