EUROPEAN SHARES
Shares opened lower in Europe on Wednesday, extending the bearish sentiment registered during the Asian trading session, as traders brace for key macro data.
Risk appetite has decreased almost everywhere, with most benchmarks led lower by healthcare and industrial shares, while investors anticipate disappointing data releases from Europe and the US.
While market operators will pay close attention to today's EU industrial production data, all eyes will be on this afternoon's US CPI release, a key metric closely watched by the Federal Reserve.
Analysts and investors worldwide are already pricing a negative reading, with 3.6% expected vs. 3.2% last month. If these expectations are correct, this new report would confirm that inflation remains "sticky" in the world's largest economy, paving the way for more monetary tightening and an environment of higher interest rates for longer than anticipated.
Of course, this situation would put further pressure on stocks, likely causing a significant shift in equity allocation in investors' portfolios on a short to mid-term basis.
On the other hand, stronger data than expected could come as a "good surprise" to everyone, boosting hopes of a coming end to the current monetary tightening cycle and confidence in riskier assets.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.