EUROPEAN SHARES
European markets traded slightly higher on Monday, bouncing back following last week’s sell-off, as traders brace for another busy week.
Short-sellers took some profits out shortly after the first opening bell of the week, preventing the STOXX-50 index from dipping lower than the psychological 5,000 pts level.
Even though the short-term uncertainties in the market might keep investors from buying riskier assets with such high valuations, the overall sentiment remains strong.
While the last batch of surprisingly good macro data may have supported the case for central banks to remain patient with their dovish monetary switch, the fact that investors know these easing cycles will eventually come means all market dips can be seen as opportunities to buy.
Speaking of macro developments, after last week’s US NFP, which topped estimates for the fifth time in a row, all eyes are now on this week’s US CPI data.
If this next inflation report proves a downside trend, this could sharply affect market sentiment and lead to a new market high.
In addition, traders will focus on other major data, such as decisions on rates from the ECB, New Zealand and Canada, and CPI data from Brazil, China, Germany, France and Spain ahead of the Q1 earning season’s kick-off on Friday.
This will likely cause market volatility to remain high throughout the whole week.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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