A tentative session for global stock markets today as both European and US benchmark indices edged higher on easing geopolitical concerns between the West and Russia. Russian President Vladimir Putin alleviated concerns somewhat after stating that while Russia would stand up for itself it would not do so at the cost of confrontation with the outside world. The comments, addressing members of parliament in Crimea provided some lift to global markets in spite of weaker than expected European data released earlier in the day.
The most notable upset to emerge from the macro data was the surprise contraction in Germany’s second quarter GDP figure with preliminary readings indicating the economy had shrank -0.2% from the prior quarter’s reading of 0.8% expansion y/y. Eurozone inflation data released later on in the morning also compounded worries of a stagnating European economy as consumer prices in July contracted -0.7% m/m from a 0.1% increase the previous month. Investors seemed to shrug off the weaker data as most major European indices ended the session in positive territory with the positive mood carrying over to the US session.
Spot gold prices erased early gains towards the end of the European session with prices finding firm support just below yesterday’s close around $1,312/oz. Prices have found firm support above $1,310/oz in recent sessions as investors look for further clarity from world leaders regarding the situation between Russia and Ukraine and continuing unrest in the Middle East.