Risk sentiment improves on positive data

US stocks advanced to fresh highs on Thursday on strong JP Morgan earnings data for Q2. Dow Jones industrial average advanced 0.72% to 18504.56, S&P 500 rose 0.52% to 2163.59 while Nasdaq composite added 0.57% to 5034.06. For S&P 500 and Dow Jones those were new record highs. JP Morgan shares rose 1.5% on strong corporate data for Q2 which had a positive effect on the whole banking sector which has been suffering from bad news recently. Today at 14:30 CEST the advance retail sales for May came out positive in US. At the same time the consumer price index for June came out negative, MoM and YoY, while outlook was positive for both. The price index ex. food and energy was neutral. At 15.15 CEST the industrial production and capacity utilization for June will come out, the outlook is positive. At 16:00 CEST the May consumer confidence index from University of Michigan will come out. At 19:00 CEST the Baker Hughes oil rig count is anticipated. At the same time Fed’s Williams speaks at closed event in Massachusetts. At 19:15 CEST the Fed's Bullard and Kashkari speak at OMFIF (Official Monetary and Financial Institutions Forum) meeting in St. Louis.

European stocks advanced to three-week high in early trading on Thursday on expectations the bank of England will cut the rates later in a day to spur economic growth after Brexit but later retreated as BoE left the interest rates unchanged. On its yesterday meeting Bank of England surprisingly decided to leave the interest rate at 0.5% while it was expected to be halved to 0.25%, according to Reuters polls. The rate cut would have been the first in more than seven years and now is expected in August meeting of BoE. The stocks indices were advancing due to strong performance of mining and energy sectors. STOXX EUROPE 600 and FTSEurofirst edged up around 0.6% each. Anglo American, Rio Tinto and Glencore gained 1.8 to 3.5%. At the same time the banking sector which has already lost 29% this year performed well on Thursday with Deutsche Bank gaining 4.2% and UniCredit soaring 5.8%. Even automobile sector was on the rise with BMW, Daimler and Fiat stocks adding form 2.1 to 3.3%. EURUSD is traded today at around 1.1130 after 1.1110 a day before. British pound advanced 0.4% to $1.3395 to end the week 3.5% higher. Today European markets opened lower after the terror attack in French Nice overnight. At 11:00 CEST the consumer price index for June came out neutral in Eurozone.

Asian stocks were advancing to 9-month highs on Friday on strong economic data from China. The 2Q economic growth smashed expectations as the data showed 6.7% economic expansion while industrial output and retail sales were also on the rise. Yuan strengthened to the US dollar. Japanese Nikkei rose 0.7% set to close the week 9% higher as prime-minister Shinzo Abe was planning to introduce additional fiscal stimulus after his coalition won the elections. USDJPY added around 0.5% to 105.81 yen per dollar.

Oil futures prices rose 2% on Thursday and continued advancing overnight but retreated a bit on Friday as US data showed weak demand for fuel in US. Brent oil and WTI oil futures lost 1% each, to $46.92 and $45.23 a barrel respectively.

Spot gold fell 0.2% to $ 1.333.10 an ounce and is headed for some more losses. The gold had been advancing for six straight weeks but now is correcting down on improving investors sentiment and strengthening US dollar after strong US payrolls for June.