EUROPEAN SHARES
European shares and US futures contracts were little changed on Friday as traders digested the latest batch of mixed macro developments from the US.
The market optimism brought by dovish hints during the latest FOMC meeting has faded, and this is for two main reasons.
First of all, yesterday’s US data topped expectations by far and highlighted the Economy’s resilience, which shattered hopes of quick dovish monetary moves from the Fed.
In addition, the surprising rate cuts from the SNB have also boosted expectations that many other central banks may start their easing monetary cycle sooner than the FED. This has had a significant impact on the Forex market, further boosting appetite for the greenback.a significant impact on the Forex market, further boosting appetite for the greenback.
In Europe, even if the rate-cut cycle still remains blurry so far, the fact that the single currency remains under pressure against the US Dollar may lead EU indices to outperform US benchmarks in the short term.
However, market volatility may not be fully over for the week as traders will focus on more speeches from both ECB and FED officials later today.
The STOXX-50 index pulled back towards a newly established floor of around 5,026.0pts, still trading above its short-term bullish trendline so far.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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