Daily Financial Markets Update: Return of Risk Appetite? – Apr 11, 2016


After taking a few hits earlier in the week, global equities were able to close Friday on a more upbeat note. The Dow 30 index ended 35 points up to 17,576.96 (+0.20%), the S&P 500 index closed 5.69 points higher to 2,047.60 (+0.28%) and the Nasdaq was up 2.32 points to 4,850.69 (+0.05%).

The S&P 500 VIX, which is considered a gauge of market uncertainty, fell 0.80 points to 15.36 (-4.95%) to indicate a drop in risk aversion. Canadian jobs data came in much stronger than expected for March, as the economy added 40.6K jobs versus the estimated 10.4K gain, while crude oil prices closed higher.

WTI crude oil rallied past $40/barrel while Brent crude oil rose to $42/barrel. Gold is up to $1,252.50/ounce while silver climbed to $15.450/ounce.

The German DAX closed 91.64 points up to 9,622.26 (+0.96%), the French CAC 40 closed 57.21 points up to 4,303.12 (+1.35%), and the Euro Stoxx 50 was up 37.78 points to 2,909.35 (+1.32%). Even UK markets edged higher, with the FTSE up 67.52 points to 6,204.41 (+1.10%).

Risk appetite back on this week?

Market watchers seem to be starting the week on a shaky note, as futures are looking mixed. Nikkei 225 index futures for June delivery are down 240 points (-1.52%), S&P ASX 200 futures are down 20.5 points (-0.42%) but China A50 futures are up 100 points (+1.05%).

Asian session traders seem to be wary of potential currency intervention from Japanese officials, as they’ve emphasized last week that they’re monitoring the yen’s appreciation closely. However, investors are still doubtful that the Japanese government or central bank can take action. Earlier today, Chinese inflation reports came in mixed, as the headline CPI held steady at 2.3% instead of showing an improvement while the PPI showed a smaller 4.3% decline.

Other event risks lined up for the week include the release of the UK CPI numbers, US retail sales, US CPI, and Australian jobs data. The Bank of Canada and the Bank of England also have monetary policy decisions scheduled, although both central banks are widely expected to keep interest rates unchanged for the time being.

US futures are in the red for now, with Dow 30 futures down 40 points (-0.23%), S&P 500 futures down 5 points (-0.25%) and Nasdaq futures down 12.50 points (-0.28%). In Europe, German DAX futures are up 102.3 points (+1.07%), French CAC 40 futures are flat, and London FTSE futures are down 12 points (-0.21%).


To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.