Written by Paul Rosenberg
Today, European equities saw a reprieve from recent selling on the heels of a bounce in China following their 4Q GDP report. China reported year-over-year over growth of 6.9%, in line with expectations, but the worst since the depths of the financial crisis. This sparked speculation of seeing further easing measures from the Chinese authorities, which buoyed Chinese shares. The Shanghai composite rose 3.22% to close over the 3k mark to 3,008.
The DAX ended the day higher to 9,664, +1.5%. Helping sentiment beyond China was the German ZEW survey for both ‘Current Situation’ and ‘Economic Sentiment’. Both were higher than analyst expectations. Prints of 59.7 and 10.2, respectively, were registered.
In Paris, stocks fared even better with the CAC 40 closing higher by 1.97% to 4,272. The UK benchmark index, FTSE 100, increased by 1.68% to 5,877.
In the US, stocks are currently modestly higher with the S&P 500 gaining 0.54% to 1,890.
The Euro is higher right now by 0.19% to 1.0914, following a mostly negative London session on mixed data. Euro-zone CPI ticked higher on a month-over-month basis, 0.0% for December versus -0.1% in November. On a year-over-year basis core CPI was 0.9% versus market expectations of 0.8%. ZEW survey for ‘Economic Sentiment’ was 22.7 for January compared to prior month reading of 33.9. See prior ZEW readings for the Union’s largest economy, Germany. The next big focus will be on the ECBs meeting set for Thursday.
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The British pound versus the US dollar sailed lower to the worst levels since March of 2009 on dovish commentary from the Bank of England’s Governor, Mark Carney. On a docket of disappointing data the pound has been selling off for several weeks, with today’s commentary echoing the poor data. Carney said there is no need to raise rates at this time in light of a dour assessment of the global economy among other factors. Inflation figures were a bit better than expected today, though, with the CPI index in December showing inflation growth of 1.4% year-over-year versus analyst expectations of 1.2%. GBPUSD is currently trading at a rate of 1.4174, lower by 0.46%.
The AUDUSD is trading higher today on the back of stronger risk sentiment, rising by 0.91% to 0.6924. This comes after falling to near a 6-year low.
USDJPY is also buoyed by risk appetite, although waning into the US afternoon session along with the US stock market. It is up by 0.30% to 117.68 at this time.
No real identified driver for gold in today’s session as it trades down by a marginal 0.39% to $1,087. Silver is higher by 1.25% to $14.07.
Crude oil has had a volatile ride as it traded higher through all of the Asian session, but reversed trend during mid-London hours. The early catalyst came on the back of a report showing China demand for oil likely hit a high last year. Additionally, support came from risk trends being strong in Asia and through much of Europe. The WTI contract has since sold off of its peak price of $30.16, now trading at $29.29. Iran sanctions being lifted is seen as further headwinds for oil as it is estimated 500,000 bpd will be added to global supply. The International Energy Agency says, though, they expect this to slow to 300,000 bpd after the first quarter.
Written by Paul Rosenberg, analyst for www.EconomicCalendar.com
Original Source: http://www.economiccalendar.com/2016/01/19/european-closing-notes-stocks-rebound-carney-crushes-the-pound/
