Risk sentiment stays buoyant at the start of an eventful week
Wall Street stocks advanced on Friday, with the S&P 500 closing at a record high despite US inflation soaring 6.8% year-over-year in November to the highest rate in 39 years. Investors shrugged off the report as the data came in line with expectations. Core CPI rose 4.9% from a year ago, also in line with estimates. The S&P 500 rose 0.95%, the Dow Jones Industrial Average gained 0.6%, and the technology-focused Nasdaq Composite climbed 0.7% ahead of the weekend.
Today in Asia, equities were mostly higher though gave up some early gains by the close. Worries over the fallout from the new coronavirus variant receded further, with the focus shifting to the central bank parade due this week. in part, regional markets were inspired by reports that Chinese authorities pledged proactive fiscal policy and ensured economic stability in 2022. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2%
European stock markets opened marginally higher on Monday, with investors staying cautious as the U.S. Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank are all due to make decisions this week. The pan-European Stoxx 600 rose by 0.5% in early deals. US stock index futures are slightly higher in early pre-market trading.
In currencies, the dollar is back on the offensive across the market ahead of the FOMC meeting. EURUSD failed to hold above the descending 20-DMA and got back under the 1.1300 figure, threatening the 1.1260 intermediate support, a break below which would pave the way towards last week’s lows in the 1.1230 area. The key risk for the common currency is the European Central Bank decision that will stand in stark contrast to the Federal Reserve this week. As such, the pair could dip to fresh long-term lows below 1.1200 in the coming days.
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