European Stocks Tumble on Global Economic Pessimism!
Stocks in Europe tumbled on Wednesday, because a certain amount of negative sentiment returned to the markets. This was due to bad loans in Spain, slowing growth in China and on the likelihood that there will be no further economic stimulus in the U.K.
The German DAX Index plummeted 1%. The French CAC 40 fell 1.6%. The U.K.’s FTSE 100 slumped 0.4% and the Spanish IBEX 35 Index slid 4% to its lowest rate since March 2009. Spain’s largest bank, Santander, dropped 4% to 4.81 euros. CaixaBank fell 3.5% to 2.6 euros. Repsol slide 6.2% to 15.4 euros.
Crude Oil is trading near its lowest close in a week following yesterday’s report that stockpiles climbed twice as much as forecasted. Oil prices slid to the $103.09 level on Wednesday. U.S. supplies added 3.9 million barrels last week, according to the Energy Department. The low prices come on slowing growth in China and on the easing of tensions with Iran and the West.
The forex market has been very volatile this morning, as there has been a lot of negative economic news from the leading economies. The Australian Dollar made impressive gains versus the U.S. Dollar and Yen in early trading. The EUR/USD pair is down slightly at the $1.3121 level, as confidence starts to trickle back to the Dollar. This comes with surging Spanish borrowing costs. However, the GBP/USD pair is trading higher this morning at $1.6043.
There are a number of important economic data releases coming from the leading economies in the next few hours. What’s more, today is the first day of the G20 meetings, so you are advised to follow the upcoming events closely.
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• 12:30 GMT USD Unemployment Claims – This is a measurement of the number of people that filed for unemployment insurance for the first time during the past week. If the actual figure is equal to or less than the 370K forecast, then we could see a very bullish Dollar today.
• 14:00 GMT EUR Consumer Confidence – The publication is the most important coming out of Europe today. The result will be highly important in determining which direction the Euro will go.
• 14:00 GMT USD Existing Home Sales – The release measures the annualized number of residential buildings that were sold during the previous month, excluding new construction. The figure is set to increase to 4.62M, which is likely to really support the U.S. Dollar. Therefore, open up Call options in the USD as soon as possible.
• 14:00 GMT USD Philly Fed Manufacturing Index – This is a leading indicator of economic health, because businesses react quickly to market conditions. The result is set to be 12.1, and a better result than this is required to push the greenback higher during Thursday’s trading session.
• Day 1 All G20 Meetings – The G20 meetings is attended by finance ministers and central bankers from the world’s most industrialized nations. It is crucial that you follow this event, as market moving issues will be discussed. High volatility is expected today, so you should open positions in your favorite underlying assets.
• 23:50 GMT JPY Tertiary Industry Activity m/m – This is the sole economic data release from the Japanese economy today, and it will be the factor that will push the JPY higher or lower, as the end of the trading week approaches. It measures the change in the total value of services purchased by businesses. The figure is forecast to increase to 0.8%, which would show an improvement in the Japanese economy. Start initiating positions in the Yen now if you want to make profit this Thursday.