By IFCMarkets

US stock markets reopen today after Monday’s Labor Day holiday, with index futures pointing to opening higher after the S&P 500 fell 3.4% over the week. The dollar gained against the yen on Monday, and is extending its gains today. Today at 11:00 CET National Federation of Independent Business small business optimism index for August will be released. The outlook is positive. AT 15:00 CET August Labor Market Conditions Index will be published. The tentative outlook is positive. And at 20:00 CET August consumer credit will be released, the tentative outlook is negative.

European stocks rose on Monday as market sentiment stabilized after volatile trading left equities lower last week. The euro grew stronger against the dollar. The Stoxx Europe 600 rose 0.5% after finishing 2.8% lower last week. Germany’s DAX 30 rose 0.7% to 10,108.61 helped by data showing German industrial output rose in July at its fastest pace this year. Glencore PLC outperformed as its shares rallied 7% after the miner and commodities trader said it plans to reduce its debt by third to $20 billion. Glencore also announced it will suspend production at two of its mines, reducing copper output by 400,000 tonnes. The news supported copper prices and other copper producers with Antofagasta surging 7.3%. Today at 10:00 CET second quarter revised GDP estimates will be released in euro-zone. The tentative outlook is neutral.

Nikkei lost 2.4% today and entered a negative territory for the year to date as investor confidence was undermined by soft trade data from China, spurring fears the economy of one of its main trading partners is weaker than has been acknowledged so far. Data showed also the second quarter GDP of Japan shrank an annualized 1.2 %, less than the initial estimate of 1.6 % , but the revision upward was due to higher growth in inventories accompanied by bigger fall in capital expenditures which point to lower growth outlook for the remainder of the year.

Chinese stocks rallied today for the first time in five days as the Shanghai Composite Index advanced 2.9% in the last hour of trading on speculation that state backed funds bought shares to stabilize the market. Trading was volatile with the value of shares traded about 80% below its June 8 peak. Data today showed that China’s exports fell 5.5% in August from a year earlier in dollar terms, while imports fell 13.8%. The market sentiment was hurt by official data release the previous day showing authorities spent $93.9 billion in August to support yuan. Goldman Sachs report estimates China spent 1.5 trillion yuan ($236 billion) trying to support its stock market since a rout began three months ago. China announced plans today to introduce a “circuit breaker” mechanism at Shanghai and Shenzhen stock exchanges, to be tied to the CSI 300 Index, which will suspend trading when the index moves up or down 5%, and suspend trading for the day if the index rises or falls 7% .

Oil prices are stabilizing today after strong German economic report showed exports and imports hit record highs in July despite a slowdown in China. At the same time global oversupply persists as OPEC is producing at record levels to defend its market share from US shale drillers.

Market Analysis provided by IFCMarkets