Sunshine reigns across eurozone data

Chris Beauchamp IG

More good news from the eurozone has sent investors running back to European stocks, while oil traders are living through a storm of new pre-OPEC headlines.

Vigour returns to the eurozone
New all-time highs on the cards for stocks?
Kuwait & Trump headlines hit oil price

Today it is the turn of the eurozone markets to lead global stocks higher. PMIs from the region this morning continued to paint a picture of health, with only some weakness in the French manufacturing number spoiling the overall impression of an ongoing recovery. What has been remarkable has been the speed with which indices like the FTSE, S&P 500 and Dow have rebounded to close to their all-time highs. There is, it seems, no shortage of investors across the globe willing to jump in on the slightest sign of weakness (and also an equally large, if not larger, number of those wanting to try and short the market in the teeth of one of the strongest bull runs of recent memory).

Attention turns increasingly to the oil price, as OPEC gears up for its next meeting. We have already had plenty of headlines this morning, as Kuwait lets everyone know that a big extension in cuts could be difficult to achieve. This sounds like expectation management – given the surge in crude prices in recent weeks, the cartel needs to play down hopes of a deal, so that when one arrives the market will roll over obediently and continue bidding up the oil price. There are plenty of risks to this strategy, with one appearing this morning as President Trump airs the idea of selling some of the US stockpile to raise cash. Everywhere OPEC turns, it seems, it runs into a new supply glut. Ahead of the open, we expect the Dow to start at 20,940, up 46 points from last night’s close.

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Chris Beauchamp

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