US equity markets closed higher on Thursday as stronger than expected GDP data led a market rally that saw the tech-focused Nasdaq posted a fresh all-time closing high.
Accendo Markets Analyst, Mike van Dulken noted – “Financials were at the forefront of the equities rally, with Goldman Sachs contributing the most gains to the Dow Jones, while the sector led risers on the S&P500 as the blue chip index closed 0.3% higher.”
The European markets pulled back slightly this Friday, broadly slipping into the red after the bell.
The FTSE led the losses, dropping nearly half a percent as trading got underway. Spreadex Analyst Connor Campbell commented – “That move sounds more drastic than it actually is, however, with the UK index still almost exactly in the middle of the 7300 to 7400 trading bracket it has inhabited for all of March. Interestingly the FTSE’s losses came despite a milquetoast open from the pound; sterling couldn’t quite close at the top end of yesterday’s gains against the dollar, keeping it around $1.245, though it is still at an effective month high against the euro.”
There could be a change in tone this morning dependent on the state of the UK’s final fourth quarter GDP reading. Campbell noted – “Unexpectedly revised higher to 0.7% during the last look, the headline figure likely won’t budge; however, the 2nd estimate in February also contained news of a drop in the yearly growth rate, as well as a dive in business investment, so the market reaction may end up being centred on the nitty gritty of the Q4 report. Friday also brings the latest current account reading; the deficit is forecast to shrink from £25.5 billion to £16.3 billion between July and September 2016, something that could lift the pound.”
For the day ahead the focus will primarily be on Europe with the release of the German employment data and Eurozone inflation figures attracting investors’ attention. ADS Securities Analyst Konstantinos Anthis suggested – “the expectations for all their reports are bearish; with retail sales in Germany expected to show contraction and the Eurozone inflation levels not ticking higher the Euro should remain under pressure for yet another day.”