Market Analysis

The euro is trading in the green during early Friday session

FOREX

The euro is trading in the green as Friday’s session gets going in Europe, recovering some of the ground lost during the previous day. The single currency dropped 0.44% in relation to the US dollar on Thursday, following the publication of disappointing German and French PMI. The situation in Europe requires careful handling by the ECB, as high inflation calls for monetary tightening, at a time when economic indicators exacerbate worries over the growth prospects for the eurozone economy, especially in a scenario of rate hiking by the central bank. Against this background, the euro could face further headwinds, as investors may reprice expectations over the timing and scope of the ECB’s monetary tightening.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES 
Markets opened in the green in Europe at the end of the week, extending gains registered in Asia overnight, with tech shares leading the way. Market sentiment improved yesterday after Fed Chairman, Jerome Powell, reaffirmed his “unconditional” will to tame down inflation. However, while some investors perceived these words as good news, others remain sceptical about the impact of such policies while the economy starts to show signs of weakness. The next CPI print will probably set the tone for a few more weeks, but meanwhile, we don’t expect any significant directionality on most benchmarks.

Today will be a busy day as traders wait for the EU Leaders Summit as well as a batch of macro data from the US with the new home sales for May, due this afternoon.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader

 

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