The sentiment in the Eurozone continued this morning

Fundamental View

Yesterday saw a consolidation in stocks as we made moderate lows before pushing back higher in overnight trade, closing above the low of the 27th in the S&P 500. This has given a brief respite to the index which was this morning down 1.83% on the month. We’ve seen a rally in peripheral fixed income with Greek yields down 21 basis points in yesterday’s trading session and the ATHEX up 3.16%. We saw in yesterday’s session the miss on Pending Home sales, lower at -3.7% against the expected 0.5%. US Jobless claims posted better than expected results at 265k, well below the unspoken target of 300k. Overnight we saw slightly disappointing results from Google; in comparison with Apple’s earnings earlier in the week it is evident that the tech sector as a whole has been fairly mixed with Dell and IBM presenting mediocre results. With Google paring back on its GoogleGlass product as Apple is preparing to launch its first new product since Steve Jobs passed away and record sales of its iProducts we can see the impact on both the NASDAQ and the S&P as the lack-lustre results have caused a slight downturn in the Asian session.

Today’s View

The sentiment in the Eurozone continued this morning with the release of Eurozone Inflation figures, seeing a slight miss on expectations with a reading of -0.60% against the expected -0.50% with a 0.2% miss on the core. What we have seen is the Euro pusher higher against the dollar, presenting the potential that there were market participants pricing in a worse than expected number and causing a move higher to fair value with only a slight miss. We also saw Spanish GDP growth print a build of 0.7%, with an accelerating rate of growth. The positive sentiment was amplified by European unemployment beating expectations with a reading of 11.4% against an expected 11.5%. Crude oil has pushed higher this morning which has caused the dollar to struggle against many of the currency pairs. Looking ahead we have US GDP growth figures, expected at 3.10%. This is expected to print lower as we saw disappointing Durable Goods orders earlier in the month. This is followed by the Chicago Purchasing Manager survey and the University of Michigan Sentiment and Current Conditions readings; the clearest trade is likely to be in dollar-based pairs; stocks could be a slightly more difficult read ahead of month end and the tradition closing of weekly positions.