European equity indices added further gains throughout the session after faltering slightly at the opening bell. The majority of benchmark indices managed to build on gains accrued in previous trading sessions as investors continued to digest Fed comments as well as their revised economic growth outlook. Global optimism continued to trend higher as US markets opened, with both the S&P 500 and DJIA reaching record highs at the open on firm buying. The lack of major economic data releases today allowed the positive sentiment from yesterday’s trading session able to rollover today as market participants continued to digest the better than expected economic data released yesterday.
Front month Brent prices struggled to hold onto early gains above $115/bbl, slipping back towards support around $114.70 as investors continued to monitor the situation in Iraq. Prices have rallied 5% since the start of the month on supply disruption speculation, however, substantial gains above $115 may prove difficult to reach unless real supply shocks materialise.
On the macro front, next week kicks off with the preliminary US manufacturing PMI reading for June as well as the Chicago Fed national activity index for May which will provide market participants with further market colour. With the Richmond Fed manufacturing index to follow on Tuesday any positive surprises could see US equity indices push to new record highs.