European stocks posted the biggest gain in three weeks on Tuesday on expectations of more Chinese stimulus measures after China’s economy grew at the slowest pace in 25 years. The euro strengthened against the dollar as investors bought back the euros sold to fund purchases of high-yield currencies of emerging markets. The Stoxx Europe 600 index ended 1.3% higher, Germany’s DAX 30 rallied 1.5% to 9664.21, and France’s CAC 40 gained 2%. Mining shares advanced as China is a major buyer of commodities. BHP Billiton rallied 3%, Anglo American gained 2.6% and Sweden’s Boliden rose 1.1%. French oil company Total added 1.4% although the company announced it will likely report a 20% fall in 2015 earnings because of lower oil prices. Today at 10:30 CET December labor market data will be released in UK. The unemployment rate is expected to remain at 5.2% while average weekly earnings over a three-month period are expected to fall year-on-year to 2.1% from 2.4%.
Nikkei entered a bear market today after closing down 3.7% at 16,416.19, which is 20% below last year's peak. Yen moved higher against the dollar with falling oil undermining market sentiment.
Asian markets are lower on negative sentiment as commodities slide persists. Hong Kong’s Hang Seng stock market index fell 3.5%. China’s stocks are falling despite expectations of more stimulus after weak growth statistics released on Tuesday. Yesterday the China Securities Journal reported that the government could raise deficit spending to around 3% of GDP.
Today at 16:00 CET Bank of Canada Rate Decision will be announced. The central bank is expected to keep the interest rate at 0.5%.
Oil futures prices resumed the decline today after Brent closed higher on Tuesday. March Brent crude rose 0.7% to $28.76 a barrel on London’s ICE Futures exchange on Tuesday, while February WTI crude fell 3.3% to $28.46 a barrel on the New York Mercantile Exchange. After sanctions on Iran were lifted investors are concerned higher crude oil exports from Iran will add to global glut at the time when global demand is expected to fall due to economic slowdown. International Energy Agency report released on Tuesday forecast around 1 million barrels a day of excess supply in 2016.
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
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