A relief rally across the European equities following the US Fed decision

Thursday, December 19, 2013

European equity markets rallied on Thursday, following the Fed’s decision to trim the pace of its QE programme by $10 billion to $75 billion, while at the same time verifying that its key interest rates would remain at low levels for even longer than previously promised. Following the FOMC policy meeting decisions, DAX, CAC, IBEX and London equity indices posted strong gains, ending higher on the day between 1.43% and 2.3%.

On the macroeconomic front, US weekly jobless claims rose unexpectedly by 10k, missing analysts’ expectations, despite that the US employment data remain quite volatile given the time of year. Furthermore, US existing homes sales were lower in November at -4.3 m/m due to possible higher mortgage rates. 

Across the Asia, Hang Seng ended lower as China’s Central bank decided against loosening its monetary policy. Precious metals were also under pressure with gold breaking below 1200 for the first time since late June.  Consequently, Randgold slid lower by 2.68%. 

We experienced a relief rally across the European equity markets today as the Fed boosted market confidence and increased risk appetite. In the meantime, the US dollar has strengthened with the USD index trading above 80.5 area, adding some pressure to commodity prices.


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