Falling European Debt Yields Buoy Stock Market Indices Ahead of EU Summit
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The regular Financial Markets Update from Simon Denham of Financial Spreads.
For today's update >> Financial Markets.
Spread Betting 7 December 2011
We have seen European government debt yields begin to fall in recent days as investors gain confidence ahead of the EU summit at the end of the week.
This has improved investor sentiment and helped to boost stock market indices across Europe, with the FTSE 100 up 2% in December alone.
For more about how European confidence is boosting the stock markets also see out feature Indices Spread Betting Markets Rally Ahead of EU Summit on Fiscal Integration.
Currently the FTSE 100 is trading at 5625 and technical analysis suggests that the near term resistance levels are 5650/75 and then 5720.
FX spread betting investors have been speculating on European policymakers expanding the funds available to indebted Eurozone countries, at the upcoming EU summit.
The single currency moved higher against most of its counterparts, as the hope is that the summit in Brussels will provide clear steps as to how the debt crisis can be resolved.
Along with this, the ECB is also forecast to cut interest rate from 1.25% to 1% tomorrow. This morning the euro is trading steadily higher against the dollar at $1.3437.
No different to the majority of global markets, gold has been put under pressure by negative Eurozone activity lately. In yesterdays session we saw the yellow metal attempt a break of the $1700.0 support level.
After failing to dip below this level, the tables turned and investors saw a small rally in the precious metal, pushing it up just enough to close marginally above the opening price at $1727.6. At time of writing, the commodity spread betting market hasn’t made much more ground and is trading at $1730.2.
Energy investors are also preparing to react to the news from the ECB tomorrow and the EU summit.
With this in mind, crude oil prices were moving subtly alongside the direction usually provided by the equity markets and US dollar, which were also rather limited.
The only boost it got was from the news that Iranian sanctions have been escalated as the EU pointed towards a common ban on oil imports from Iran.
Later today, eyes will be on the US Department of Energy weekly inventories report, but at time of writing, traders have only seen a slight gain in black gold, trading at $111.38.
The above comments do not constitute investment advice and neither Financial Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
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'Falling European Debt Yields Buoy Stock Market Indices Ahead of EU Summit' edited by SD, updated 07-Dec-11
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