Another positive session for European equities despite a shaky start to the day which saw most major indices open slightly lower. Risk assets managed to gain momentum during the second half of the session as buoyant US data encouraged risk assets higher. Despite headlines dominated by Russia’s annexation of Crimea, with Putin signing a treaty earlier today, calm seems to have returned to global markets after the heavy sell-offs last week.
US economic data released earlier this afternoon showed building permits stood at 1018K in February, 73K more than the previous month while housing starts narrowly missed forecasts of 910K at 907K in February. CPI at 0.1% m/m in February was as expected, offering market participants with some much needed certainty. At the time of writing both the S&P 500 and DJIA were trading 0.7% higher while the DXY struggled to lift significantly above 79.440. Investor attention will be fixed on the FOMC meeting outcome, scheduled tomorrow, which is hoped will offer further details on forward guidance as market participants expect bond buying to be cut by $10bn again this month.
Spot gold prices tested support towards $1,350 as once nervous investors regained risk appetite and withdrew from the yellow metal after comments made by Putin indicated Russia had no further desire to intervene in or split up Ukraine. Three month LME nickel prices rallied higher today, trading towards an eleven month high at $16,230 as the combination of Indonesia’s ban on nickel ore exports and concerns of sanctions on Russia shored up support for the metal. Prices have added almost 13% since the start of the month.