A positive European open follows a positive lead from the major Wall Street and Asian index’s, despite relatively low volumes, complemented by the US dollar recovering from 1-week lows overnight ahead of the beginning of the Jackson Hole summit later this week.
“With its commodity stocks maintaining the gains they saw yesterday – In part helped by a positive statement from BHP Billiton, which saw the Aussie giant bow to investor pressure and announce it was offloading its US shale business – and Persimmon up 3% following another Brexit-ignoring update, the FTSE rose 0.7% in early trading” notes Spreadex Analyst, Connor Campbell.
Over in the Eurozone the region’s major indices were just as positive, with the DAX and CAC jumping 0.8% and 0.6% respectively. Connor Campbell Added “The main focus data-wise will be on the German and Eurozone-wise ZEW economic sentiment readings – the former is forecast to fall from 17.5 to 14.8 month-on-month, while the latter is set to slip from 35.6 to 34.2.”
Analysts are expecting a softer reading from the the ZEW Survey as a stronger Euro dampens business sentiment. “The surge in euro’s price has been taking its toll on the domestic economy – as seen on other reports earlier this month – and with the ECB still considering tapering this effect will only intensify making German exporting goods more expensive” commented ADS Securities Analyst, Konstantinos Anthis.
Over in the US, “indices closed mostly higher yesterday, with the exception of the Tech-focused Nasdaq as it posts its third consecutive weaker close. Meanwhile, both the Dow Jones and S&P500 closed higher as Real Estate strength offset the negative impact of Financials and Tech.” Accendo Markets Analyst, Henry Croft noted.
It’s been a more positive 24 hours for the Dollar as tensions in the Pacific ease and investors move their attention away from US politics and on to the Jackson Hole Symposium.
“Janet Yellen will again make another effort to justify why the Fed is so keen on further rate rises when the domestic economy is so lacklustre, and her views might offer some support to the dollar. Moreover, the US currency could benefit in the medium term from expectations the euro will move lower, as Draghi is unlikely to coffer any concrete guidance on when the ECB will start tapering.” added Konstantinos Anthis.