A strong rebound for the global equity markets today as equity indices in the US and Europe opened in positive territory and posted strong gains. The CAC, DAX, IBEX and London equity benchmark indices gained between 0.45% and 1.75%, while in the US the Dow Jones index surged above 18,100 and both the S&P 500 and NASDAQ extended gains this week.
On the macroeconomic front, US Markit services PMI declined to 57.8 in April compared to 59.2 in March and Dallas Fed manufacturing activity was reported at -16 in April, missing expectations of -12. Following the disappointing US economic data, the USD index came under renewed pressure and retreated towards 96.50 against a basket of currencies.
The softer USD supported most commodity prices in today’s trading session. Base metal prices rebounded strongly with aluminium gaining over 1.15% towards $1850 and copper surging above $6,100. Zinc climbed over 2.5% to retest $2,300 and Nickel rallied over 3.2% above $13,650. Precious metal prices also rallied with gold trading above $1200/ounce and silver rallying over 4% towards $16.50.
However, crude oil prices missed the general uptrend and remained under pressure today amid ongoing concerns over record high levels of crude oil inventories. Brent futures slid lower towards $64 per barrel and WTI front month futures hovered around $57 per barrel.
This week, the main focus will be on three key Central Bank meetings including the US Federal Reserve, the Bank of Japan and the Reserve Bank of New Zealand. In addition, the uncertain economic conditions in Greece continue to dominate the markets. Due to the softer USD, the euro rebounded and climbed towards 1.090.