FOREX
The dollar index is flat in relation to other major currencies during early European trading. The markets are now on standby mode, awaiting the release of US GDP figures later today. The majority of analysts expect the numbers to confirm the slowing down of the American economy, due to the impact of inflation and higher interest rates on consumer spending and business investment. The big question now is how pronounced this slowing down has been. GDP numbers disappointing to the downside will add to the pressure on the Federal Reserve to moderate, and even halt, its ongoing monetary policy tightening, to avoid a hard landing for the US economy. Considering this scenario, a lower-than-expected GDP reading will be likely to trigger further dollar weakness.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European shares climbed higher on Thursday, alongside US futures, as reassuring earnings keep on sustaining risk appetite. Every stock index of the old continent traded in green territory, with positive performances across almost all sectors, and tech stocks continue to lead the way.
The cautious sentiment sparked by the sales warning from Microsoft yesterday has been offset by the solid earnings report published by Tesla after the closing bell, easing worries of a less robust earnings season than initially priced in. That said, investors will likely maintain their focus towards meso-news as many await further reports from the financial sector with Visa, MasterCard and Blackstone all due to report, as well as from luxury companies such as LVMH and Christian Dior. Furthermore, the macro front provides a busy agenda for traders today from another batch of major US data, with the core durable goods orders, GDP, initial jobless claims and new home sales data which are expected to provide investors with a more accurate view of where the economy is heading.
Bull traders were powerful enough to gain back control of the market on the very short term with the STOXX-50 index now above the 4,170.0pts level following the clearing of the bearish flag. This clearing is significant as it suggests the short-term consolidation is now over and that higher targets towards 4,190.0pts, 4,250.0pts and even 4,300.0pts aren’t out of reach anymore.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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