Global equity markets extended gains in today’s trading session and climbed higher following a strong rebound in crude oil prices and as concerns regarding Greece’s uncertainty eased. The DAX, CAC, IBEX and the London equity benchmark index rallied between 0.9% and 2.6%, while in the US the Dow Jones index gained over 180 points (+1.05%) towards 17,550 and the S&P 500 index surged almost 1% despite the tepid economic data.
US factory orders declined -3.4% in December missing analysts’ expectations of a 2.4% drop, while the ISM New York purchasing manager index plunged to 44.5 in January from 70.8 in December. The USD index retreated below 94.0 against a basket of currencies after hitting a high at 94.697 earlier on the day.
In the UK, Markit/CIPS construction PMI climbed to 59.1 in January from 57.6 in December, verifying improving market conditions in the UK manufacturing and construction sectors. Sterling spiked against the dollar, surging above 1.50. Furthermore, the euro surged above 1.143 against the US dollar, amid hopes that Greece will reach a deal soon with Euro Area on debt issues.
Crude oil prices continued their strong upside rally as WTI front month futures rebounded over 3% to breach $51/barrel today and Brent front month futures rallied towards $56.50. Crude prices have climbed over $9 in the last four trading sessions, suggesting the potential for subsequent gains in the short-term, following a softer USD. In London, Royal Dutch Shell, Tullow Oil and BP surged between 2.6% and 5.1%.