FOREX
As Thursday’s trading session gets underway in Europe, the US dollar remains close to the multi-month maximum reached during the previous session. The markets are reacting to the release of US economic data on Wednesday, which surprised to the upside, emphasising the resilience of the American economy and galvanising dollar hawks. Service sector activity expanded at a faster pace than predicted, and so did prices. This is a scenario that entails the continuation of inflationary pressures and creates scope for further monetary tightening from the Fed. Against this background, the strength of the dollar doesn’t surprise, as traders price in the rising probability of another interest rate hike when the Federal Reserve meets later in the month.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source:ActivTrader
EUROPEAN SHARES
Share markets kept drifting lower in Europe on Thursday, extending the bearish sentiment registered in Asia, as disappointing macro news further dented market sentiment.
Uncertainty is rising, and the appetite for risk keeps decreasing as investors witness another batch of poor macro data from the world's second-biggest economy and the largest in the Eurozone. Today's poor data from China and Germany are significantly impacting market sentiment as they show the economic slowdown continues in both regions, putting further pressure on bets of a recovery.
Meanwhile, the uncertain market sentiment has also spread to US futures contracts as traders and analysts struggle to assess the latest batch of uneven macro data and its potential impact on the Fed's monetary tightening cycle. In addition, investors also digested the prospect of a ban on the distribution of Apple products in China after more details emerged from Beijing, reviving trade tensions with the US.
It will be a busy day on the macro front for traders as most of them patiently wait for EU GDP data, US jobless claims and crude oil inventories alongside speeches from Fed and BoC officials, which may increase market volatility significantly throughout the trading session.
The STOXX-50 index continues its dive, led lower by consumer non-cyclicals, basic materials and tech shares, as the market now trades below the 4,245 pts level, with the 4,215 pts support in sight.
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.