- Europe sees green as stocks celebrate the end of ECB rate hikes.
- European rate hike cycle appears at the peak as central bank focuses on how long rather than how much for current rates.
- Consumer data beats from China supporting risk appetite to finish the week.
European equity indexes enter the weekend broadly in the green after a good week on the charts. London’s FTSE 100 index caught a late-week rally to end the trading week into the £7,700 region. Developers and home builders were the big bidders for the United Kingdom’s (UK) major index as investors bet that the housing market slowdown could face its end.
Investor sentiment caught some support from China figures this week that saw retail sales and industrial production figures broadly beat expectations, easing concerns of a global slowdown sparked by a declining Chinese economy.
EU equities chalk in gains for the week on the end of ECB rate hikes
Germany’s DAX closed the week in the green but has struggled to regain the €16,000 level, closing out Friday near €15,870. The German index is up over 0.5% for Friday, and gained a little over 2% from the week’s lows.
France’s CAC 40 was the big winner of the major European indexes on Friday, bouncing upwards just shy of 1% and gaining 1.6% for the trading week.
The UK’s FTSE 100 ended Friday up 0.5%, capping off a 3.15% rebound from the week’s bottom and the equity index tested into sixteen-week highs on Friday.
Headwinds still remain in the future, but recent risk appetite pangs have eased for the time being and investors are pushing higher-yielding assets higher. The pan-European EuroStoxx 50 blue chip index ended the week 1.15% higher at €4,327 but has yet to re-challenge 2023’s highs above €4,450.
Investors are increasingly hopeful for an end to the tightening cycle in monetary policy, bolstered by a dovish showing from the European Central Bank (ECB) this week.
ECB President Christine Lagarde delivered what is set to be the ECB’s last rate hike for the foreseeable future, talking down the potential for future rate hikes, and declaring the ECB's pivot to focusing on rate duration rather than adjustment. President Lagarde also reiterated that while economic growth is expected to be constrained looking forward, the ECB doesn't see contraction, and stubbornly sticky inflation isn't expected to increase from this point.
FTSE 100 technical outlook
The UK major index is knocking into the high side on daily candlesticks, but profit-taking could see the FTSE slipping back to the 100-day Simple Moving Average (SMA) just below £7,650.
A pattern of higher highs could be developing, and a rising near-term trendline from August’s lows near £7,250 could provide dynamic support if an extended move lower begins to develop.
Bidders will note the Relative Strength Index (RSI) is moving into overbought territory, and another leg higher might need to wait for a pullback and the 34-day Exponential Moving Average (EMA) to gather further steam from the £7,500 handle.
FTSE 100 daily chart
FTSE 100 technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats below 1.0850 ahead of Fedspeak
EUR/USD stays under modest bearish pressure and trades in negative territory slightly below 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD stays under modest bearish pressure near 1.2650
GBP/USD edges lower toward 1.2650 after posting marginal losses on Thursday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to gain traction. Fed policymakers are scheduled to speak later in the day.
Gold holds steady above $2,380, Fed speakers in focus
Gold trades with a positive bias on Friday and holds above $2,380. The benchmark 10-year US Treasury bond yield stays flat near 4.4% following Thursday's rebound, allowing XAU/USD to keep its footing ahead of speeches from Fed officials.
XRP steadies at $0.51 as Ripple plans to expand XRP Ledger, custody services in Africa
Ripple hovers close to $0.51 on Friday, above the psychologically important $0.50 level, as traders await the court ruling of the lawsuit against the US SEC and amid new commitments from the firm to expand its services in Africa.
Disputes and De-risking: US-China trade dispute changes trade flows
The bilateral trade dispute between the US and China is entering a new round and is leading to renewed discussions about the deglobalisation of global trade in goods.