EUROPEAN SHARES
Equities traded mostly higher in Europe on Monday, but with limited price action as market sentiment remains unclear.
Most benchmarks continued to slowly pare some of the losses registered during the first week of 2024, in a rebound move following a bullish reaction over support levels.
Last week’s employment figures from the US showed investors that the economy remains more resilient than anticipated, which in itself is good news. However, some fear this situation could potentially undermine the urgency for the Fed to cut rates and adopt a more dovish approach, even though most investors have already priced in rate cuts.
The focus will stay on macro development this week, with many speeches from ECB and Fed officials alongside the crucial US CPI report on Thursday. These are expected to provide traders with much more clarity on the short to mid-term outcome for monetary policies.
In addition, investors will also pay close attention to the next earning season, which kicks off on Friday with a batch of reports from major Financial companies such as BoA, BlackRock, CitiGroup, JPMorgan Chase and Wells Fargo & Co.
Technically speaking, the STOXX-50 index trades well above 4,330.0pts, its first available support level since its rebound last Friday.
Even if bearish pressure decreases in the short term, it is still hard to say whether the current price action is the beginning of a trend reversal or just a simple pull-back before registering a new bottom. It will be interesting to watch how the market may react to the 4,495.0/4,500.0pts zone.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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