Yesterday’s rally across the global equity markets proved to be short-lived as markets in the US and Eurozone reversed and posted heavy losses in today’s trading session. The ongoing uncertainty in Greece continues to lurk in the background, causing nervous trading conditions. Furthermore, disappointing US economic data weighs heavily on market sentiment prompting investors to sell-off.
In Europe, the CAC, DAX, IBEX and London equity benchmark indices retreated sharply between 0.7% and 2.3%, while in the US the Dow Jones index declined below 18,000 and the S&P 500 and NASDAQ slid lower over 0.35%.
On the macroeconomic front, we received poor US economic data which added further pressure to the US dollar as the USD index plunged for fifth consecutive session to retest 96.0 against a basket of currencies. Consumer confidence dropped significantly to 95.2 in April compared to 101.3 in March, missing analysts’ expectations of 102.2. In addition, the Richmond Fed manufacturing index fell to -3 in April from -8 in March.
The softer USD provided upside momentum for most commodity prices. Aluminium extended gains towards $1880 and copper surged to retest $6,100. Nickel and zinc missed the uptrend and slid lower within the range while tin reached oversold territory after declining almost 4% to retest $15,600.
Gold and silver continued their strong upside rally as risk appetite across the global equity markets has been fairly limited in the last trading session. Gold extended gains and climbed towards $1220/ounce while silver rallied over 1.2% towards $17.