GTC Advisors – Positive Start to the Week Seen in Global Markets

GENEVA - July 17, 2017 - PRLog -- As we start a new week the global markets look set to continue their rally of the end of last week, specifically the European markets which look set to open higher following on from stronger than expected economic data out of China.

Britain's FTSE 100 is expected to add around 0.4% at the opening bell, according to financial bookmakers IG, with modestly smaller gains anticipated for markets in Germany, France and Switzerland.

China's economy grew at a 6.9% pace in the three months ending in June, officials indicated Monday, thanks to stronger industrial output and export data.

The reading carried regional stocks, in the form of the MSCI Asia ex-Japan index, past a two-year high and extended the recent global rally into its second week.

Investors have been buoyed by speculation that central bank signaling of faster interest rate increases may have been misinterpreted, given that Federal Reserve Chair Janet Yellen appeared to suggest that current rates won't have to rise "all that much further" based on the pace of inflation and the balance of strength in the labor market.

That theory could be tested later this week in Frankfurt with the next rate-setting meeting of the European Central Bank. Bond markets around the region have been bracing for a change in the Bank's E2.3 trillion quantitative easing program, with yields on benchmark 10-year German government bonds rising to an 18-month high of 0.58% last week.

However, given the tepid pace of inflation in the currency area, as well as falling energy prices, investors are now shifting expectations towards a more dovish statement from ECB President Mario Draghi this week that could put downward pressure on the euro -- which traded at 1.1465 overnight, near the highest level in 14 months -- but support regional equity gains.

The pound was also active in early European trading, holding at a September 2016 high of 1.3093 against the dollar as investor digest a steady stream of reports that point to a lack of a negotiating strategy within the U.K. government with respect to its pending European Union exit.

Foreign exchange investors will focus on data on June inflation Tuesday from the Office for National Statistics Tuesday, which is expected to show consumer prices accelerating at the fastest pace in more than four years.

Early indications from U.S. futures suggest both the Dow Jones Industrial Average and the S&P 500 will extend gains from their record closes Friday, while the Nasdaq is poised to add around 0.15% at the opening bell.

GTC sees the improvement in economic data out of Asia as a strong indication that globally, markets are set to continue to show gains. More importantly, the US indices are still setting record closes despite uncertainty politically and this shows significant strength in the US markets, most notably the Healthcare and Energy sectors which have both outperformed many analyst's expectations so far this year.

GTC Advisors prides itself in offering a truly global financial service. Our ability to provide a wide range of independent financial advice incorporating multiple sectors, markets and demographics is key to retaining clients and nurturing new relationships. It is our mission to support our clients in every aspect of their financial strategy that sets us apart from the competition.

Contact an advisor today for a free consultation at www.gtc-advisors.com