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Strong US economic data boost market sentiment - 29.3.2017

Dow snaps eight session losing streak

US stock indices closed higher supported by better than expected economic data. The dollar strengthened helped also by Federal Reserve Vice Chairman Stanley Fischer‘s comment he expects the Fed to raise rates at least two more times this year. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, closed 0.5% higher at 99.685. Dow Jones industrial average rose 0.7% to 20701.50 led by Apple and Goldman Sachs shares. The blue chip index snapped eight sessions of losses, the longest losing streak since 2011. The S&P 500 gained 0.7% settling at 2358.57. The Nasdaq index added 0.6% to 5875.14.

Investors confidence was boosted by Conference Board report the Consumer Confidence Index jumped to 125.6 in March from 116.1 in February, the highest level in more than 16 years. US house prices also rose to their highest in nearly three years. Strong economic data allayed fears about prospects of US economy after doubts grew about President Trump’s ability to push stimulus measures following his setback with getting lawmaker’s support for health care reform law. The trade balance report was also positive: trade deficit in goods, excluding services, narrowed to $64.8 billion in February from $68.8 billion in January. Apple shares gained 2.1% lifting its market capitalization above $754 billion after a UBS report the stock could rise another 22% in his “most likely scenario”. Today at 13:00 CET Mortgage Applications will be released in America. At 15:20 CET Federal Reserve Bank of Chicago President Charles Evans speaks about the current economic conditions and monetary policy at the International Capital Markets Conference in Frankfurt. And at 16:00 CET February Pending Home Sales will be released, the outlook is positive for dollar.

European stocks rise on positive US data

European stocks rebounded on Tuesday as concerns the Trump rally stalled after failure to secure support for president’s first legislative initiative abated. Both the euro and British Pound weakened against the dollar. The Stoxx Europe 600 rose 0.6%, Germany’s DAX 30 outperformed closing 1.3% higher at 12149.42. France’s CAC 40 added 0.6% and UK’s FTSE 100 gained 0.7% to 7343.42.

The Scottish parliament voted to hold a second independence referendum, authorizing first minister Nicola Sturgeon to negotiate with UK Parliament on holding another vote. The news negatively affected the Pound, which is under pressure as UK government is expected to officially invoke Article 50 today, which will formally begin negotiations between the UK and European Union over the terms of the Britain’s exit from the trading bloc. Today at 10:30 CET February Mortgage Approvals will come out in UK. The tentative outlook is neutral for Pound.

 GB 100

Asian markets mixed after Wall Street rebound

Asian stock indices are mixed today though positive economic data helped buoy market sentiment after Monday’s global pullback following President Trump’s withdrawal of his healthcare law before a vote Friday. Nikkei closed 0.1% higher at 19217.48 in a choppy as yen was little changed against the dollar. Toshiba shares added 1.2% as its troubled US nuclear affiliate Westinghouse Electric Company filed for Chapter 11 protection from creditors, Chinese stocks are lower with Shanghai Composite Index down 0.4% while Hong Kong’s Hang Seng Index is up 0.07%. Australia’s All Ordinaries Index is up 0.9% with the Australian dollar edging higher against the dollar.

Oil prices rise ahead of inventory data

Oil futures prices are extending gains today supported by supply disruptions in Libya and talk of possible extension into second half of the year the OPEC led output cuts. Output from the western Libyan fields of Sharara and Wafa is down by 252 thousand barrels per day after a pipeline carrying crude from the Sharara stopped operating due to armed protesters, according to source at the National Oil Corporation Tuesday. Libya was pumping 700 thousand barrels a day before the pipeline halt. May Brent crude contract closed 1.1% higher at $51.33 a barrel on London’s ICE Futures exchange on Tuesday. Today at 16:30 CET the Energy Information Administration will release US Crude Oil Inventories.

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