FOREX
The dollar weakened further during early Thursday trading. The markets are reacting to the return of concerns over the stability of the US banking sector, as well as signs of slowing down in the wider economy. A growing number of investors believe the Federal Reserve will be forced to cut rates before the end of the year, in order to avoid a sharper economic contraction, and the more this view gains traction the less support there will be for the US dollar. On the other hand, the euro is on the front foot in relation to the greenback. The single currency touched yearly maximums during the previous session, following the release of better-than-expected consumer sentiment figures in Germany and France. With a 50 basis points rate hike looming next week, the ECB, unlike the FED, still has some ground to cover and more rate increases should follow until midsummer. Against this background, further euro gains will be possible.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European benchmark indices opened slightly higher on Thursday, halting their recent bearish correction, as positive corporate earnings reports boosted market sentiment.
Investor appetite for risk grew following a batch of encouraging reports from companies in different region and from different sectors, including Deutsche Bank AG, STMicroelectronics NV, Banco Bilbao Vizcaya Argenta SA, Meta Platforms Inc and Microsoft.
This situation has brought a temporary change in market sentiment as many were pricing in far more negative announcements than revealed so far. However, with major companies such as AstraZeneca PLC, Barclays PLC, and 13 others from the French CAC-40 index yet to release their Q1 earnings, it is uncertain whether the positive trend will continue.
Traders are also keeping an eye on crucial US GDP and initial jobless claims data, looming in the afternoon, to see how the Federal Reserve may adjust the pace of its monetary tightening.
The STOXX-50 index has its eyes towards the 4,365.0pts / 4,375.0pts resistance zone following its rebound over the 4,325.0pts area.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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