ETX Capital Daily Market Bite, 13th May, 2013: Markets Pause For Breath; Fed QE Tempering In Focus
May 13, 2013 10:47 am
May 13th 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European financial markets have kicked off the first session of the week on a softer note following strong gains over the past week with traders now awaiting economic data to act as fresh catalyst for direction. Industrial output and retail sales out of China overnight showed that the pace of growth picked up last month but not as aggressively as some would have hoped. That said, the data still bodes well for resource shares with UK mining stocks currently adding strong gains on the FTSE100. There are no major European economic data releases in the session so traders will be eyeing US retail sales and business inventories this afternoon for fresh clues over the health of the US economy which has shown encouraging signs of recovery over the past few weeks. In the US, the S&P500 gained around 1.2% last week following a gain of 2% from the week before. Similarly in Europe, the EuroStoxx 500 gained 0.8% last week and 3% the week before that. Stock indices are sitting at elevated levels, providing an excuse for investors the book some profits. That said, there is no fresh bad news to trigger a sell-off as of yet. With issues in Europe abating somewhat, the US and China showing signs of recovery together with respectable corporate earnings from both sides of the Atlantic, it is difficult to predict the next event that could tarnish the upside momentum we have seen across risk assets. Over the weekend, a G-7 meeting finance meeting in London indicated that they will tolerate a weaker yen and monitor the impact on FX money markets but this event has done little to influence financial markets. Attention now turns to a meeting held by European finance ministers in Brussels this afternoon in which policy-makers will review current aid packages for Spain, Greece and Cyprus. Italy will also be selling bonds at an auction while France will be selling bills.
May 13th 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European financial markets have kicked off the first session of the week on a softer note following strong gains over the past week with traders now awaiting economic data to act as fresh catalyst for direction. Industrial output and retail sales out of China overnight showed that the pace of growth picked up last month but not as aggressively as some would have hoped. That said, the data still bodes well for resource shares with UK mining stocks currently adding strong gains on the FTSE100. There are no major European economic data releases in the session so traders will be eyeing US retail sales and business inventories this afternoon for fresh clues over the health of the US economy which has shown encouraging signs of recovery over the past few weeks. In the US, the S&P500 gained around 1.2% last week following a gain of 2% from the week before. Similarly in Europe, the EuroStoxx 500 gained 0.8% last week and 3% the week before that. Stock indices are sitting at elevated levels, providing an excuse for investors the book some profits. That said, there is no fresh bad news to trigger a sell-off as of yet. With issues in Europe abating somewhat, the US and China showing signs of recovery together with respectable corporate earnings from both sides of the Atlantic, it is difficult to predict the next event that could tarnish the upside momentum we have seen across risk assets. Over the weekend, a G-7 meeting finance meeting in London indicated that they will tolerate a weaker yen and monitor the impact on FX money markets but this event has done little to influence financial markets. Attention now turns to a meeting held by European finance ministers in Brussels this afternoon in which policy-makers will review current aid packages for Spain, Greece and Cyprus. Italy will also be selling bonds at an auction while France will be selling bills.
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