A strong rebound in global equity markets

Friday, September 26, 2014

Global equity markets rebounded strongly today, as robust US economic data boosted market sentiment and increased risk appetite for a positive finish of this fairly volatile week. The CAC, IBEX and London equity benchmark climbed higher between 0.20% and 0.7%, while the DAX index missed the trend and slid lower as disappointing German economic indicators added some pressure to the market.

On the macroeconomic front, the US GDP release showed the US economy grew by 4.6% in Q2 2014, in line with analysts’ expectations, while personal consumption increased by 2.5% during the same period, slightly less than analysts’ estimates of 2.9%. Furthermore, the University of Michigan/Thomson Reuters survey showed economic confidence rose to 84.6 in September, fairly in line with estimates, bringing optimistic signs across the global equity and commodity markets.

The USD continued its strong rally, climbing above 85.5 as the release of strong GDP figures signalled improving economic conditions for the US economy.

USD Index

DXY Curncy (DOLLAR INDEX SPOT)  2014-09-26 16-11-28

However, crude oil prices came under further pressure, partially due to the stronger USD as well as the abundant crude oil supplies in the US and Asia. Brent front month futures remained below $97 per barrel, while the WTI front month contract has slightly rebounded to retest $93 per barrel.

Base metal prices were fairly mixed. Aluminium and copper edged higher recovering from yesterday’s sharp losses, while nickel came under renewed pressure heading towards 17150.

Due to increasing risk appetite in the market, there was another round of sell-off for gold which retreated towards $1200/ounce. 

Gold Spot

XAU Curncy (Gold Spot   $_Oz )  D 2014-09-26 16-10-52

Topics: Gold, USD, Equities, EUR, DAX, DJI, Energy
More from: Myrto Sokou