European equities rally ahead of ECB's announcement

Monday, January 19, 2015

European equity markets started the week in the positive side and climbed higher amid expectations that the ECB is likely to announce on Thursday an additional package of sovereign QE bond purchases in order to boost the European economies. In addition, fairly robust European economic data provided further upside momentum and increased risk appetite. The Eurozone’s construction output surged 1.3% in November beating analysts’ expectations of a 0.1% drop.

EURUSD climbs higher in correction

EURUSD Curncy (EUR-USD X-RATE)   2015-01-19 16-23-39

The CAC, DAX, IBEX and London equity benchmark index gained between 0.65% and 1.5%, while the euro surged towards 1.1650 against the US dollar. Sterling also rallied against the dollar in today’s trading session, breaching 1.515. The UK Rightmove survey showed house prices declined 3.3% in January compared to a revised drop of 2.2% in December, while y/y prices increased 7.0% against analysts’ estimates of a 8.2% rise.  

GBPUSD rises above 1.515 against the dollar

GBPUSD Curncy (GBP-USD X-RATE)   2015-01-19 16-25-12

As the US equity and bond markets are closed for the Martin Luther King holiday, trading volumes might remain thin during today’s session.

Crude oil prices remained under pressure amid persistent concerns regarding high levels of crude oil inventories along with a slowdown of global oil demand growth. Brent front month futures retreated towards $49 per barrel, while WTI front month futures slid lower over 1.7% towards $47 per barrel.

WTI front month futures remain under heavy pressure

CLH5 Comdty (WTI CRUDE FUTURE  M 2015-01-19 16-27-42

Precious metals remained in negative territory with Gold falling 0.5% towards $1270/ounce, while silver retreated to retest $17.50.  

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