European equity markets rebounded strongly on Tuesday, supported by the speech from the Fed’s Chair, Janet Yellen who spread optimism across the equity and commodity markets. The CAC, DAX, IBEX and the London equity benchmark index gained between 1.06% and 1.23%, while the Dow Jones and S&P 500 indices surged more than 0.80%, at the time of writing.
The US dollar has been trading sideways with the USD index currently consolidating around the 80.5 level. In the US, wholesale inventories rose slightly by 0.3% in December, missing analysts’ expectations. In the UK, BRC retail sales surged by 3.9% in January compared to a revised 0.06% in December, beating analysts’ expectations and spreading a more optimistic tone across the London equity market.
Mining stocks added the most points to the London index today, following a rebound in base and precious metals prices. Freshnillo and Randgold climbed higher by 5.68% and 3.86%, respectively, while Rio Tinto, Glencore, BHP Billiton and Anglo American also posted strong gains between 1.67% and 2.3%.
In technological sector, ARM Holdings extended gains by adding another 2.3% in today’s trading session.
Tomorrow, market participants will be watching for the releases of the Eurozone’s industrial production data as well as imports/ exports data from China, while the main focus will turn to the details of the US Federal Reserve budget.
In the meantime, we expect the recent uptrend across the global equity markets to continue following the optimistic tone from the US. However, the release of Chinese macroeconomic data tomorrow could provide further signs about the economic prospects across Asia.