Risk aversion recedes quick notably in US session. DOW is currently trading above more than 350 pts and that helps major European indices closed higher too. As we noted here, DOW’s rebound is not too much a surprise based on technical consideration. But for the near term, the question it whether is can sustain.
In the currency markets, Australian and New Zealand Dollar are trading as the strongest one for now, followed by the US Dollar. Sterling is doing it’s own thing, basically react to no event today, and extends recent selloff. Following Sterling, Swiss Franc is the second weakest. Based on recent pattern, Franc’s decline can be attributed to the rally in Turkish Lira, suggesting easing pressure on emerging markets. Yen is the third weakest, partly on market sentiments stabilization. Also, 10 year JGB yield closed sharply lower again today 0.114. It was above 0.15 just a few days ago.
Euro is mixed for the moment. But it does extend recent decline against Dollar. ECB stands pat today as widely expected. President Mario Draghi also delivered a composed, yet uninspiring press conference. Euro is just resuming what it has been doing after the event. Here are some suggested reading on ECB:
- ECB Reveals No Details about Reinvestment. December in Focus
- ECB Review: Steady Draghi Amid Disappointing Data
- ECB press conference live stream, starting in a few minutes
- ECB Recap: Draghi Sticks to the Script, EUR/USD Bears Eye 16-Month Low Near 1.13
A quick snapshot at the markets in the US:
- DOW is up 346 pts or 1.39% at 24925. Let’s see if it can reclaim 25000 today.
- S&P 500 is up 1.55%
- NASDAQ is up 2.41%
- Five-year yield is up 0.016 at 2.980
- 10-year yield is up 0.010 at 3.134
- 30-year yield is down -0.001 at 3.345
- Gold is down 0.3% at 1230
In Europe:
- FTSE closed up 0.59% at 7004.10, regained 7000 handle
- DAX rose 1.03% to 11307.12
- CAC rose 1.60% to 5032.30, back above 5000 psychological level
- German 10 year yield rose 0.0032 to 0.401, still defending 0.4
- Italian 10 year yield dropped -0.1281 to 3.489. That’s a good sign as spread with German is now rather close to 300.
