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.

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Chris Beauchamp

EUR/USD bounces off lows, back to 1.1860

EUR/USD now manages to regain some balance, retesting the 1.1860-1.1870 band after bottoming out near 1.1830 following the US NFP data on Wednesday. The pair, in the meantime, remains on the defensive amid fresh upside traction surrounding the US Dollar.

GBP/USD rebounds to 1.3660, USD loses momentum

GBP/USD trades with decent gains in the 1.3660 region, regaining composure following the post-NFP knee-jerk toward the 1.3600 zone on Wednesday. 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 humble gains in the US Dollar and 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.