European shares rose on Friday, despite Asian benchmarks closing in the red, as investors brace for Eurozone’s CPI figures.
The sell-off in Asian Equities due to the US-Sino trade war resurgence didn’t spread to European contracts on Friday, as investors continued to cheer on the prospect of a much more dovish monetary policy to come.
Indeed, cooling inflation, bad economic data and lower oil markets all tend to fuel hopes of a significant switch in central bank monetary policy.
Speaking of inflation, most traders now have their eyes towards the next reading coming from the Eurozone to see if what they saw last week in the US will also be confirmed on the old continent.
Analysts also expect a significant drop here, with a 2.9% projection compared to 4.3% last month. Again, if these figures regarding the deceleration of price pressure were to be confirmed, or are even surprisingly better, then we should expect the current rally to continue further as risk appetite will likely grow more.
This scenario is currently getting priced in as the STOXX-50 index briefly traded above its short-term resistance at 4,330.0pts, with the 4,350.0pts zone now in sight.
Elsewhere, investors will also pay attention to today’s US housing starts data alongside speeches from Fed officials, while the spectre of a deadline regarding a deal about the government’s funding is slowly coming back into the spotlights.
Pierre Veyret – Technical analyst, ActivTrades
The sell-off in Asian Equities due to the US-Sino trade war resurgence didn’t spread to European contracts on Friday, as investors continued to cheer on the prospect of a much more dovish monetary policy to come.
Indeed, cooling inflation, bad economic data and lower oil markets all tend to fuel hopes of a significant switch in central bank monetary policy.
Speaking of inflation, most traders now have their eyes towards the next reading coming from the Eurozone to see if what they saw last week in the US will also be confirmed on the old continent.
Analysts also expect a significant drop here, with a 2.9% projection compared to 4.3% last month. Again, if these figures regarding the deceleration of price pressure were to be confirmed, or are even surprisingly better, then we should expect the current rally to continue further as risk appetite will likely grow more.
This scenario is currently getting priced in as the STOXX-50 index briefly traded above its short-term resistance at 4,330.0pts, with the 4,350.0pts zone now in sight.
Elsewhere, investors will also pay attention to today’s US housing starts data alongside speeches from Fed officials, while the spectre of a deadline regarding a deal about the government’s funding is slowly coming back into the spotlights.
Pierre Veyret – Technical analyst, ActivTrades