28th November 2016, GTC Advisors – European Markets Open Lower
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GENEVA, Switzerland - Nov. 28, 2016 - PRLog -- European indexes opened lower today after futures trading saw the majority of indexes fall roughly 1% pre market.
As the European Central Bank looks set to start discussing how the will progress their current QE strategy the political climate within the Eurozone could start to change. With a referendum due in Italy on the 5th of December and both France and German having general elections next year, the current feeling in Europe is one of cautious anticipation.
After the surprise Brexit and Trump votes seen recently it is hard to see how the ECB can make any steadfast decisions. With inflation still stuck at 0.5%, significantly below the 2% target set by the ECB, it is almost impossible that they will stop the current QE funding any time soon. Each month the ECB is buying public and private debt at the rate of €80 billion euros. This is due to be stopped in March yet if this were to stop there are huge concerns about some of the larger banks within Europe and their ability to sustain the debt levels they are seeing.
On the 8th of December the ECB will meet and discuss how they will continue after March 2017 and the tentative QE deadline.
Whilst we wait for their guidance there is every chance that the major indexes in Europe will see volatility. The recent good spell has been just that, good. Several markets are close to all-time highs and with the UK appearing to have sidestepped a major financial crisis, optimism is rife in the second largest trading block.
With the Federal Reserve in the US warning that there could be a rate increase just round the corner, many analysts are waiting to see what the UK can negotiate re: trade deals and how and whether Trump will follow through with the policies he has already outlined.
European Market Data:
FTSE – 6,773.93 (-0.98%)
DAX – 10,593.26 (-0.99%)
CAC – 4,502.84 (-1.04%)
BEL – 3,463.02 (-0.85%)
SMI – 7,831.53 (-0.63%)
Gold – The safe haven commodity is again seen rising after losing almost 7% over the last month. The yellow metal rebounded from 9 month lows in early trading, gaining as much as 0.92% to $1,193.80, up from Fridays closing session of $1,171.21.
The metal had been under pressure since the US Election results as the USD strengthened and more details about Trump possible policies looked like they would spur the economy. Now with a slightly weaker Dollar due to possible rate increases, Gold looks set for another rally before the end of the year. Support is seen past $1,200.00 and US Futures are already up over 1.2% at $1,193.50.
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