European markets are set for a stronger open this morning

Good morning all!

European markets are set for a stronger open this morning when trading gets underway after a strong performance overnight in Asia saw the major markets jump to the upside. The week ahead is likely to be one that keeps one eye on geo political situations, despite the economic calendar being jam packed full of data for the week. The data in fact started over the weekend as we saw a reading from China on its CPI inflation, and despite these readings coming in bang in line with expectations markets have jumped aggressively. There is yet more data out in Asia as we get going early on this morning with consumer confidence readings and the BOJ monthly economic survey. Asia will be a dominating force throughout the week, with Wednesday the most important day for data with Japanese GDP and BoJ meeting minutes as well as Chinese retail sales and industrial production numbers.

Today’s European trading session could actually be a fairly quiet one in terms of market led data. The economic calendar is looking very light of data and this could quite easily let the geo political situations take centre stage. Over the weekend while a three day cease fire was finally being observed in Gaza, Iraqi Prime Minister when on state television to angrily criticise the President Fuad Masum. The US, who have already launched four airstrikes on IS militants sent a letter backing the President and urging Iraq to form an inclusive government. President Masum has the power to intervene in a row that would see Mr Maliki serve a fourth term as Prime Minister after winning an election in April. However he has not been offered the term and so far President has failed to intervene in the row, heightening tensions in a country that must remain united if it is to put a stop to the growing IS militants.

Although the stories in Iraq, Russia and Ukraine are likely to continue to dominate news agenda’s acorss the globe there is a whole host of economic data due for release this week, with Wednesday the busiest day by far. As stated earlier Asian markets will be begin with data from Japan and China, but then focus quickly shifts to the UK and Eurozone. Most notably we will get more CPI readings from the Eurozone. This of course takes on added importance as Mario Draghi waits to see whether his plan of TLTRO’s has started to work in pulling the figure higher. However his work may all go to waste if Russia continue to ban major foods from western Europe. If farmers have to find new buyers for almost 10% of the products it could well be that this drives the inflation price lower as food price fall on a surplus of goods. Now this may be down the line a little but is a very real danger should the tit for tat sanctions continue to be enforced.

Overall markets will start to a fairly quiet day in terms of data but will most definitely pick up as the week goes on. The real worry for markets will be the uncertainty over the horrendous stories gripping Iraq and Gaza. Any escalation in fighting or major developments will of course give traders and extra unwanted story to keep an eye on when it comes to their trading. Ahead of the open we expect to see the FTSE100 open higher by 42 points with the German DAX higher by 89 points.