Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
Chinese GDP helps drive Europe to third successive weekly gain
00:00, 18 October 2013
Europe A strong improvement in Chinese GDP data along with an anticipation of continued Fed stimulus into 2014 has given Europe's markets further impetus into the end of the week, as investors celebrate the fact that the uncertainty of the last three weeks coming from the US has finally been concluded in the short term. Three successive weeks of strong gains have seen the DAX make new record highs this week while the FTSE has come within touching distance of its September highs. While basic resource stocks have been amongst the best performers the gains haven't been substantial with the Fresnillo leading the pack, while Anglo American has underperformed, sliding back after a disappointing performance in its iron ore division. Insurance giant Prudential was also near the top of the benchmark index on a strong read across on after a strong set of numbers from its Asian peer AIA. Bookmaker William Hill's share price reacted as if it had lost a bet after being on the end of a downgrade from JP Morgan to "underweight" dropping to the bottom of the pile. Also lower satellite broadcaster BSkyB was slightly weaker as traders took some profits after yesterday's strong gains. Concerns about a possible strike don't appear to be deterring interest in Royal Mail shares which managed to trade above 500p for the first time since last week's IPO. US US markets have once again opened higher with the S&P500 once again opening at record highs, while the Dow Jones continues to underperform, remaining some distance away from its record highs seen back in September. Company earnings have once again been the centre of attention with Google's share price surging on the open after its numbers last night came in above expectations on both profits and revenues. Also reporting we've seen General Electric beat expectations, coming in at $0.36c a share; however the revenues came in slightly below expectations. Morgan Stanley also got in on the act, posting profits of $0.44c a share, with better than expected revenues. FX The US dollar has had a rather mixed day losing ground against the Australian dollar after the Chinese GDP numbers, and hitting an 8 month low on the US dollar index as traders bet that the Fed will continue to their asset purchase program into the first quarter of 2014. The euro continues to struggle near the 1.3700 level and the highs seen earlier this year, providing the ECB with major headache if it manages to overcome this level and targeting a potential move towards the $1.40 area. The pound continues to find itself fairly well supported as well after this week's improvement in the unemployment data and yesterday's better than expected retail sales numbers. Commodities Chinese GDP data has given copper prices a small boost, but they still remain becalmed within the broad range they've been in since the beginning of August between $3.20 and $3.40. As for gold, despite anticipation of a delayed start to a tapering program, the uncertainty over the timing continues to keep investors cautious about doing any form of large scale buying. While equity markets continue to march higher, crude oil prices on both benchmarks, US and Brent look set to finish the week lower, despite a weak US dollar. It would appear that for all the optimism about future rises in equity markets, the oil price is reacting to the demand outlook rather than the weak US dollar. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.