ETX Capital Daily Market Bite, 8th February, 2013: European Markets Firmer On Upbeat Overnight Leads
February 8, 2013 8:56 am
February 8th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
A late rebound on Wall Street Thursday and firmer session in Asian markets overnight thanks to upbeat Chinese trade data provides European markets early support Friday. Chinese trade data for January showed monthly exports rose 25% and imports climbed 28.8% from the year prior giving the country a trade surplus of around $29.2billion. But it wasn’t all good news out of Asian markets as Japan’s Nikkei index slid after tech bellwether Sony Corp reported poor earnings with the shares sliding 10% in reaction. As such, tech stocks are likely to be under pressure here in Europe however commodity-linked players exposed to China are likely to march higher. In Europe, traders are likely to creep back into the market in a better mood after risk appetite declined in the previous session following ECB head Mario Draghi turning noticeably dovish at the central bank’s latest press conference. Draghi said the euro’s recent strength could hamper an economic recovery, curbing fuel demand – traders fretted about the impact of a stronger euro on exports. However, Draghi said the ECB are watching the euro appreciation closely, remained sanguine about the euro zone’s outlook and left the door wide open for more easing, raising expectations for a rate-cut in the coming months. Also on the positive side, Spain actually had a relatively solid bond auction on Thursday, easing some concerns relating to the political instability there as investors still have appetite for Spanish paper. German trade activity remained sluggish in December which will be a drag on Q4 GDP numbers. Looking ahead, attention will be on the ECB’s weekly repayment of LTROs while Iceland, Belgium sell bonds and the UK sells bills. In the US, trade balance data will be eyed closely later in the session.
February 8th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
A late rebound on Wall Street Thursday and firmer session in Asian markets overnight thanks to upbeat Chinese trade data provides European markets early support Friday. Chinese trade data for January showed monthly exports rose 25% and imports climbed 28.8% from the year prior giving the country a trade surplus of around $29.2billion. But it wasn’t all good news out of Asian markets as Japan’s Nikkei index slid after tech bellwether Sony Corp reported poor earnings with the shares sliding 10% in reaction. As such, tech stocks are likely to be under pressure here in Europe however commodity-linked players exposed to China are likely to march higher. In Europe, traders are likely to creep back into the market in a better mood after risk appetite declined in the previous session following ECB head Mario Draghi turning noticeably dovish at the central bank’s latest press conference. Draghi said the euro’s recent strength could hamper an economic recovery, curbing fuel demand – traders fretted about the impact of a stronger euro on exports. However, Draghi said the ECB are watching the euro appreciation closely, remained sanguine about the euro zone’s outlook and left the door wide open for more easing, raising expectations for a rate-cut in the coming months. Also on the positive side, Spain actually had a relatively solid bond auction on Thursday, easing some concerns relating to the political instability there as investors still have appetite for Spanish paper. German trade activity remained sluggish in December which will be a drag on Q4 GDP numbers. Looking ahead, attention will be on the ECB’s weekly repayment of LTROs while Iceland, Belgium sell bonds and the UK sells bills. In the US, trade balance data will be eyed closely later in the session.
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