Market Analysis

London is one of today’s best performers with the FTSE-100 Index

 

EUROPEAN SHARES 

All EU indices opened significantly higher on Thursday, despite a mixed trading session in Asia and a light market correction on US futures overnight. Price pressure continues to grow in the US as investors, despite what Janet Yellen recently reaffirmed, see rising inflation becoming less and less temporary. This situation is weighing on traders’ sentiment and increasing expectations of a new round of hawkish measures to come from the Fed, with tapering as well as rate hikes expected next year. However, the message remains different for European equities. Even though ECB member Robert Holzmann recently said the central bank could join the Fed and start reducing its massive bond buying program in September 2022, investors interpreted that message as the ECB is going to continue printing until Q3 next year. This is keeping the current extremely dovish conditions in place as well as the prospect of higher highs on EU shares alive, at least in the short to mid-term.

 

London is one of today’s best performers this morning with the FTSE-100 Index trading well above 7,300pts. The price remains inside its short-term bullish channel following the clearing of the upper band of the mid to long term large consolidation. 7,310pts and 7,235pts are the immediate supports for the market while 7,470pts remains a realistic target.

Pierre Veyret– Technical analyst, ActivTrades

 

Source: ActivTrader

 

FOREX

The US dollar index is trading at a 16-month high during the early part of Thursday’s session, following the release of US inflation data that confirmed consumer prices are rising at the fastest pace in more than 30 years. October’s increase exceeded the expectations of analysts and further weakened the theory that the current inflationary pressures are transitory. In this scenario, the likelihood of the Fed starting hiking rates in 2022 grew, carrying the US dollar with it as other major central banks, such as the ECB, are unlikely to take such steps any time soon.

Ricardo Evangelista – Senior analyst, ActivTrades

 

Source: ActivTrader

 

OIL

WTI was flat during the early part of Thursday’s session, after dropping almost 4% on Wednesday following the release of US inflation figures that were on the upside of expectations. Consumer prices in the US rose at the fastest pace since 1990 during the month of October, causing a sharp drop in the price of the barrel as investors believe that the ongoing inflationary pressures may force the US authorities to tap into the country’s strategic reserves, in order to increase the amount of oil in the market and ease pressure on prices.

Ricardo Evangelista – Senior analyst, ActivTrades

 

Source: ActivTrader

 

 

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