European Stock Markets are Heading South after Seven Days Rally
European stock markets are heading south, snapping the rise over the last seven days. The Stoxx Europe 600 is down after extending a 1-year high yesterday, along with the DAX and the FTSE. Approximately 50% of the firms in the index have now reported results and 51% of these beat profit estimates, while 61% exceeded sales forecasts. The FTSE 100, which managed to close above the 7300 mark Wednesday but fell back slightly again today and the DAX is also trading below 11800, but both remain at lofty heights and investors seem to be turning cautious again at these levels, amid ongoing political uncertainty and as the Fed remains on course for further tightening. The Nikkei underperformed, however, as a strong Yen weighted on automakers and exporters. Oil prices meanwhile are little changed on the day.
US Dollar is Trading Lower on Sudden Drop in U.S. Treasury Yields
March U.S. Dollar Index futures are trading lower shortly before the regular session opening on Thursday. The market gapped the opening, sending the index through yesterday’s low, confirming Wednesday’s closing price reversal top. The catalyst behind the move was a sudden drop in U.S. Treasury yields on Wednesday.
Yields rose early in the session, fueled by stronger-than-expected U.S. retail sales and consumer inflation data as well as hawkish testimony from Fed Chair Janet Yellen on Tuesday. Some traders are saying that Yellen’s cautious tone on Wednesday may have encouraged profit-taking in the U.S. 10-year Treasury Note and U.S. Dollar Index futures markets.
Gold Pushes Higher, Bitcoin Jumps on Global Concerns
The gold bulls seemed to have regained back control of the instrument and they will be looking forward to pushing the prices even further higher. It is to the credit of the bulls that they managed to hold the prices above 1220 even during the dollar onslaught since the beginning of the week and now they are being rewarded handsomely.
Gold is trading at 1238.75 up 0.44 as investors are back in search for a safe haven. Bitcoin is also acting as a safe haven instruments and is trading above 1000. BTC/USD is currently trading at 1024.76 up 1.09%.
Oil Prices Rise on Rumors of OPEC Output Cut Extension
Oil futures are trading higher shortly before the regular session opening. The market is also trading inside yesterday’s range which suggests investor indecision and impending volatility.
The market continues to remain range bound, supported by increasing compliance with OPEC’s plan to cut output and capped by record high U.S. crude oil and gasoline inventories.
The overall flat trend, which is rare in this market, looks to be persisting, with news of record crude and gasoline stockpiles in the U.S. failing to generate strong downside momentum, partly as recovering U.S. economic growth suggests increased demand.
WTI crude prices are up 0.6% today, at $53.40, which is just a few cents from the intraday peak. Prices have extended the rebound from yesterday’s $52.75 low. The week’s high at $53.95, seen on Monday, has remained resistance