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European equities are set to open marginally lower on the open. Although the main indices are pushing all-time highs, there isn’t the runaway optimism seen during other bull markets.
With such negative cues hanging over the markets such as Greece and Ukraine, and worries about global growth and deflation, there’s certainly a bit of reluctance on the part of the bulls to take markets higher. With a host of big economic figures and central bank meetings out next week, traders are likely to tread cautiously going into the weekend.
A slump in oil prices led the energy sector lower yesterday. But it was counterbalanced by the fact that core consumer price index, a measure of inflation closely watched by the Federal Reserve, rose more than estimates. At the same time the US Commerce Department reported that manufactured goods had the biggest increase since July. Unemployment data was disappointing, with claims surpassing expectations. So amid mixed signals the Dow Jones closed flat again around 18,212.
The single currency resumed its slump against the greenback to drop 164 pips to 1.1198. With Greek drama still unfolding, it was more the rally in the dollar which caused it. In turn that was fuelled by hopes US inflation could be on the rebound as shown by the core CPI data.
WTI April futures are under fresh downside pressure following last week’s crude inventories data. The truth of the matter is the oil market remains oversupplied whatever Saudi officials’ future demand predictions. A former Qatari oil minister already said ‘OPEC does not need an emergency meeting’.
Fed chief Janet Yellen’s testimony undoubtedly helped gold prices, but the last few days’ rally was accentuated by renewed Chinese physical demand.
Marius is a dealer at Capital Spreads. His involvement with CFDs and spread betting started in 2008 after graduating from London Metropolitan University with an MSc in Finance. He provides analysis of the forex, stock index and commodity markets, with a particular focus on oil and gold.
Jonathan is also a dealer at Capital Spreads. Having started his career in the City trading interest-rate and bond derivatives in 2005, he entered the spread betting and CFD industry in 2007 by joining the dealing desk at City Credit Capital. After successfully managing multiple-asset risk books across the European, US and Asian time zones through the height of the financial crisis, he joined Capital Spreads in 2010.
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