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European Market Update 26 Jul 2018

Posted by Tim Sholl on 26-Jul-2018 21:34:44

The ECB holds the interest rate meeting today and the market expects that interest rate settings will remain the same at -0.40% , and that the QE stimulus settings are expected to remain the same after they announced last month that the stimulus will be wound down by the end of the year. The potential for a trade deal to be finalised between the US and Europe will improve sentiment which should help stock prices.

Stock indices are mixed today after auto stocks declined due to tariff fears yesterday , but the positive news between the EU and the US on a possible deal should help that sector to improve. The tech sector in Europe and the US has been very strong , but the overnight fall in Facebook by up to 20% after outlining a fall in future earnings due to security breaches has caused some uncertainty. Oil prices look to be regaining strength which should help the oil sector improve after Shell announced a huge share buyback .

The FTSE is lower at 7660 down 0.54% , the DAX is at 12720 down 0.13% , the CAC is at 5441 up 0.29% and the MIB is up strongly at 21752 up 0.79% . In the FX markets the US dollar has rebounded slightly against the major currencies with the EUR at 1.1710 down 0.14% , the GBP is at 1.3178 down 0.10% and the JPY is stronger by 0.13% at 110.82.

Bond yields have moved higher on the more positive sentiment and latest prices are US10 at 2.96% up 3 , the UK10 at 1.29 up 2 , and the DE10 at 0.41 up 2.  Japanese 10yr bonds are also moving higher from super low levels and are now at 0.09%

 

Topics: Trading, Market News, European Market Update