EUROPEAN SHARES
European shares opened mostly higher on Monday, extending solid gains registered overnight in Asia, as investors continue to cheer on improving economic data.
Bullish sentiment prevails today, supported by recent macro developments such as the US NFP, and Chinese PMI, which indicate that central banks may be about to win their fight against inflation while avoiding negative impacts on growth.
In addition to stronger economic data, market sentiment is also being supported by bullish price action from oil markets, sparked by OPEC+’s pledge to add an extra 1 million barrel output cut in July. This has affected most benchmarks, with a particular impact on the energy sector which has registered one of the best performances so far.
Financial shares were also among the top movers this morning, boosted by the prospect of higher borrowing rates in July after the US NFP highlighted a much more resilient US job market than most analysts predicted, providing the Fed with a stronger hand in its monetary tightening campaign.
Macro news is likely to keep dominating the agenda this week, with another batch of PMI, PPI, ISM, and GDP data from Europe, Asia and the US alongside speeches from ECB President Lagarde and Fed officials ahead of next week’s crucial ECB and FOMC meetings.
From a technical standpoint, the STOXX-50 remains well-oriented following the bullish break-out of its bearish trendline. The market, currently capped by the 4,333.0pts level (61.8% retracement), could quickly accelerate to 4,365.0pts and 4,400.0pts by extension if the bullish sentiment were to persist further this week.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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