Market Snapshot – Euro Stocks Move Higher As Fears Recede

The European stock markets are up across the board with the Italian Index leading the way as the government has finally managed to come to the aid of couple of banks that were in trouble. This not only helped to save the banks and its clients but also clearly showed the intent of the government that it was ready to sort out the mess, whatever it takes. This also gave a boost to the other stock indexes in Europe as well, which includes the DAX. Though the DAX did get a boost, it continues to trade well within the established range, as it has been doing over the past few weeks and we should wait and see whether this good news would be enough to keep pushing it higher in the days to come.

It could be an interesting week as we have several central bank leaders making speeches all through the week and it is likely that a few of them might touch upon the monetary policy during their speeches. This should spice up the markets and bring in some volatility which is generally not expected in the last week of a month when the liquidity dries up, along with the economic news, and this leads to low volatility in the markets. We also have the GDP data from the US later in the week which will be another important data point that will be watched closely in the days to come to see if there is an improvement in the data from the US which will favor another rate hike this year.

Gold prices dropped suddenly during the course of the day today as was widely expected when the prices reached the 1260 region towards the end of the day. We did expect a fall back towards the support at 1240 but were not expecting quite a quick fall. With the prices now in the support region, it remains to be seen whether the bottom would give away which will then push the prices towards the next support at 1220 in the short term.