ETX Capital Daily Market Bite, 19th February, 2013: Markets Edge Higher Thanks To Strong ZEW
February 19, 2013 10:58 am
February 19th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European share markets are softer again this morning with traders remaining on hold ahead of German ZEW data. With US markets closed for a public holiday on Monday and Asian markets overnight trading in a mixed manner, European stock indices have little cues for firm direction to the upside or downside. Corporate news is not helping so far, prompting investors to refrain further from adding risk exposure. Danone’s full year numbers are decent on the whole but the food giant warned the downturn in the European periphery will hit profits in 2013. Nestle meanwhile has had to remove products containing horse DNA. Attention is now on the ZEW survey which is expected to rise for the sixth month which would be the longest streak of increases in 2 years. German sentiment has been gradually improving since the start of the year and yesterday, the Bundesbank offered the market an upbeat outlook for the Germany economy, indicating the country will be able to avoid a recession this year. That said, political instability in Spain and Italy may be a cause of worry reflected in the ZEW survey – traders are now eyeing the Italian general elections which take place this coming weekend. Much of the attention will be on how peripheral bond yields will react heading into the Italian elections. Italian 10-year bond yields are currently around 4.4%, more than 25 basis points off their January 2013 lows. US markets are back in business later, so volumes should pick up markedly in this session versus yesterday’s session. Traders will cast their attention to the NAHB housing report which is expected to remain robust in January.
February 19th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
European share markets are softer again this morning with traders remaining on hold ahead of German ZEW data. With US markets closed for a public holiday on Monday and Asian markets overnight trading in a mixed manner, European stock indices have little cues for firm direction to the upside or downside. Corporate news is not helping so far, prompting investors to refrain further from adding risk exposure. Danone’s full year numbers are decent on the whole but the food giant warned the downturn in the European periphery will hit profits in 2013. Nestle meanwhile has had to remove products containing horse DNA. Attention is now on the ZEW survey which is expected to rise for the sixth month which would be the longest streak of increases in 2 years. German sentiment has been gradually improving since the start of the year and yesterday, the Bundesbank offered the market an upbeat outlook for the Germany economy, indicating the country will be able to avoid a recession this year. That said, political instability in Spain and Italy may be a cause of worry reflected in the ZEW survey – traders are now eyeing the Italian general elections which take place this coming weekend. Much of the attention will be on how peripheral bond yields will react heading into the Italian elections. Italian 10-year bond yields are currently around 4.4%, more than 25 basis points off their January 2013 lows. US markets are back in business later, so volumes should pick up markedly in this session versus yesterday’s session. Traders will cast their attention to the NAHB housing report which is expected to remain robust in January.
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