Robust economic data increases risk appetite in global equities

Tuesday, March 24, 2015

The robust economic data from the US and Eurozone improved market sentiment and increased risk appetite throughout the global equity markets. In Europe, the CAC, DAX and IBEX surged between 0.95% and 1.4%, while the London equity benchmark index missed the strong uptrend and edged higher by 0.25% around 7050 at the time of writing. The US equity markets recovered from yesterday’s losses and climbed higher while the USD index edged higher breaking above 97.0 against a basket of currencies.

USD index edged higher towards 97.0

DXY Curncy (DOLLAR INDEX SPOT)   2015-03-24 16-08-56

On the macroeconomic front, US Markit manufacturing PMI (preliminary) climbed to 55.3 in March from 55.1, beating analysts’ expectations of 54.6. Furthermore, New Home Sales surged 7.8% in February from a 0.2% drop in January while the FHFA house price index dropped to 0.3% in January. In the Eurozone, Germany’s manufacturing PMI (preliminary) climbed to 52.4 in March compared to 51.1 in February and the Eurozone’s manufacturing PMI (preliminary) surged to 51.9 in March.

In the UK, the inflation rate fell to zero in February y/y, for the first time on record. Sterling remained under pressure and fell towards 1.4850 against the US dollar.

GBPUSD remained under pressure

GBPUSD Curncy (GBP-USD X-RATE)   2015-03-24 16-02-14

Crude oil prices fluctuated strongly today due to a fairly volatile USD which provides mixed signals across commodity prices. WTI front month futures rallied earlier and hit a high at $48.56 but gave back gains and hovered around $47 per barrel. Precious and base metal prices were also fairly mixed on the day. 

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