Asian and European equity markets remained under pressure and posted renewed losses today as the attacks in Paris, France, on Friday caused high uncertainty across global markets. The tragic events limited any risk appetite and caused nervous trading conditions. Japan’s economy contracted by 0.8% y/y in Q3 2015, following a revised 0.7% drop in Q2 2015, missing analysts’ expectations of a -0.2% decline.
The euro declined sharply for a third consecutive session today and dropped below 1.1200 against the USD, hovering around 1.1180. There was some relief in the markets regarding the Greek elections. However, market participants remain cautious ahead of this weekend’s elections in Catalonia, Spain, as the local government is looking to make this a separatism ballot with a possible clash with the Spanish national administration.
Asian equity markets rebounded strongly overnight. The Hang Seng index rallied by 2.50% towards 22,100, while the Shanghai Composite index climbed higher by 4.9% to retest 3,150. There is increasing volatility and nervous trading conditions as investors await key decisions from the FOMC meeting tomorrow. The USD index remains strong after hovering around 95.60 against a basket of currencies.
Asian equity markets remained under pressure overnight. Market participants will be keeping an eye on today’s release of the ZEW economic survey expectations in Germany and the Eurozone, as well as the Eurozone’s trade balance in July and unemployment data for Q2 2015. In the UK, this morning’s key inflation data will draw investors’ attention.
Asian equity markets extended declines overnight, remaining under heavy pressure. WTI front month futures have been hovering around $39 per barrel ahead of the release of the weekly EIA oil inventories data. The softer USD has failed to provide any support to base metal prices which have been under serious pressure amid concerns over Chinese slowdown.
Greece’s last minute appeal to international creditors for financial aid yesterday got rejected. Thus, the country became the first developed economy to default on IMF payment as the deadline expired yesterday. The IMF confirmed yesterday that the country has not made its scheduled 1.6 billion euro loan repayment to the fund, so economic conditions deteriorated.
There is high uncertainty that dominates the global equity and commodity markets as current situation in Greece deteriorated significantly over the weekend. Greek Prime Minister Alexis Tsipras called for a referendum in the early hours on Saturday 27th June.
Another Euro-group meeting came to an end without reaching a deal yesterday. European Finance Ministers and the Greek government failed for a fourth time in a week to seal an accord. The ongoing uncertainty caused high volatility and dragged global equity markets lower.
Greece’s main stock exchange rallied 9% yesterday, showing its biggest increase since February, and outperformed the rest of European equities. Furthermore, yields on Greek government bonds declined amid hopes that the Greek government will reach a deal with its creditors this week in order to release bailout funds.
European equity markets rebounded from earlier losses and climbed higher in the afternoon session. The European currency initially climbed higher and tested a high at 1.1330 but gave back earlier gains and hovered around 1.1220 against the US dollar.
Crude oil prices rebounded and posted renewed gains this morning with WTI front month futures climbing above $61 per barrel and Brent futures surging above $68 per barrel. The weaker USD provides strong support to the oil market, while the main focus will turn to the weekly EIA oil inventories report this afternoon.
The USD rebounded and climbed higher for third consecutive session as the USD index rose towards 96.0 against a basket of currencies. The stronger dollar has weighed on market sentiment, limiting any strong upside potential across the global equity and commodity markets.
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.
A strong rebound for the global equity markets today as equity indices in the US and Europe opened in positive territory and posted strong gains. Following the disappointing US economic data, the USD index came under renewed pressure and retreated towards 96.50 against a basket of currencies.
Global equity markets reversed and posted renewed losses in today’s trading session as disappointing economic data weigh on market sentiment and limited risk appetite. The US dollar came under renewed pressure with the USD index retreating sharply below 98.00 against a basket of currencies.
China’s economic growth slowed to 7% during the first quarter of 2015, hitting its slowest pace since 2009. The release of China’s GDP figure was in-line with analysts’ expectations. Industrial production increased by 5.6% y/y in March, missing estimates of a 7.0% rise.
Precious metal prices remained in negative territory with gold falling towards $1180/ounce. Base metal prices have been under pressure this morning as the strong USD currently weighs heavily on market sentiment limiting any upside potential.
The US dollar weakened further today following fairly tepid US economic data. The softer US dollar offered support to most commodity prices. Crude oil prices reversed earlier losses and climbed higher in the afternoon session, while base and precious metals posted renewed gains.
The euro plunged today towards 1.06 against the US dollar after having tested a high at 1.1040 yesterday. The CAC and DAX indices posted renewed losses following ongoing concerns regarding Greece’s economic stability and prospects.
European equity markets rebounded strongly in today’s trading session, while the euro remained under further pressure, trading around 1.10 against the US dollar. The Bank of England and the European Central Bank held interest rates unchanged at their current low levels, providing further support to equity markets.
China’s Central Bank announced a 0.25% interest rate cut over the weekend which improved market sentiment and increased risk appetite. China’s HSBC manufacturing PMI climbed higher to 50.7 in February compared to 50.1 in January, beating analysts’ expectations.
European equity markets fluctuated strongly in today’s session as mixed manufacturing PMI data from the US, Asia and Eurozone failed to provide clear direction. The euro edged higher and held around 1.1350 against the US dollar today, despite the ongoing uncertainty regarding Greece’s economic prospects.
The weaker than expected US economic data added further pressure to global equity markets today and weighed on market sentiment, prompting investors to another round of heavy sell-off across the US and European equities. It has been a fairly volatile month including nervous trading conditions for global equities and commodities markets.
European equity markets continued their strong uptrend in early trade this morning. The European Central Bank confirmed yesterday that it will purchase EUR 60 bln of assets per month compared to EUR 50 bln initially expected. The programme will run from March 2015 until at least September 2016 with a total balance sheet expansion of over EUR 1 trn.
European equity markets opened this morning higher ahead of ECB’s decision. According to latest rumours, it is expected that the European Central Bank has been debating plans to make monthly purchases of EUR 50 bln in government bonds for a one to two year programme. The official announcement is expected at 1.30 GMT today.
European equity markets started the week in the positive side and climbed higher amid expectations that the ECB is likely to announce on Thursday an additional package of sovereign QE bond purchases in order to boost the European economies.