Equity markets in Europe are in positive territory as improved political prospects is boosting investor sentiment.
The prospect of the US government backing the tax reforms proposed by President Trump is triggering buying. Dealers are also optimistic about the possibility of Germany’s Christian Democratic Union (CDU) striking a deal with former coalition partners the Social Democrats.
Shares in Hunting are up 4.8% after the company issued a positive trading statement. The firm stated it expects full-year revenue to be $700 million, which would be in the higher end of the forecasts. The company’s performance continued to ‘exceeded management expectations’. The share price hit a seven month high and if the bullish sentiment continues it may target 619p.
A pullback in the US dollar has propped up the EUR/USD and the GBP/USD. Dealers took their profits on the greenback after a positive run recently. The US dollar could be in demand again later in the week when the US government is tipped to vote on the tax proposals, and it is looking more likely they will be passed.
The euro will be in focus this morning as the eurozone will reveal the inflation report for November, and economists are expecting a reading of 1.5%. The latest manufacturing and services figures out of the region have been positive but the CPI rate has lagged behind. Mario Darghi, the President of the European Central Bank (ECB) has kept the door open to additional monetary easing should it be required.
Sterling is continuing the bullish move that it has been in since March. The UK will announce the latest Confederation of British Industry (CBI) industrial order expectations at 11am (UK time), and traders are expecting a reading of 14, down from 17 in November.
At 3pm (UK time) the US will announce the National Association of Home Builders (NAHB) index and the consensus is for a reading of 70, unchanged from November.
We are expecting the Dow Jones to open up 121 points at 24,722, and we are calling the S&P 500 up 11 points at 2686.
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