Brighter day for stocks as bargain hunters step in

Chris Beauchamp IG

Stocks have rebounded on the first day of the new week, providing a sharp contrast with the gloom that prevailed on Friday, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Calmer mood prevails across stock markets

Friday’s selloff has seen countered by a wave of buying from investors, while the VIX has dropped back sharply. The drop in the chances of a 50bps rate hike suggests that a calmer attitude prevails among investors, despite the slew of weaker jobs data from the US. Much now hangs on the CPI report, especially since Friday’s payroll report failed to provide much new information on the US economy.

FTSE 100 rallies despite signs of China disinflation

The FTSE 100 has put its best foot forward this afternoon, rallying through Friday’s highs thanks to a solid performance from HSBC. China’s overnight inflation data has not dented enthusiasm for the bank’s shares, while a recovering oil price helped Shell to make headway too.

Author

Chris Beauchamp

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.