CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

Europe Sees a Strong Start But Will It Last

Article By: ,  Senior Market Analyst
February 12, 2018 4:28 AM

Indices across Europe have kicked the new week off on the front foot, talking the lead from a rebound in the US on Friday. Whether this proves to be anything more sustainable than a dead cat bounce remains to be seen. Still the FTSE is up over 100 points or 1.4% pushing it towards 7200, whilst the Cac up trading over 1.6% higher and the Dax has tagged on an impressive 2.2% taking it comfortably above 12,350 and en route to 12,400. The US futures markets are also pointing to a stronger start for the Street, but its too early to get complacent that this correction has bottomed out. 

Pound & Euro Tentatively Higher Versus Dollar 

Movements in the forex markets are much more subdued. The pound continues to hover around resistance at $1.3860, after falling on Brexit nerves at the end of last week. Brexit fears are unlikely to be disappearing anytime soon, especially given that a series of key note speeches are expected in the coming days, over how UK Prime Minister Theresa May and her war cabinet see the future relationship between UK and EU. May is under pressure from Brexit hardliners for a clean break Brexit and signs of this in these speeches will keep the pressure firmly on the pound potential dragging it back towards $1.38, before opening the doors to last week’s low of $1.3750. 

Meanwhile the Euro is seen moving marginally higher against the dollar although struggling to break above $1.2280. With little to work with on the economic calendar, the forex markets could be short of volatility until Tuesday or Wednesday with the release of inflation data for the UK and the US respectively. 

US CPI to ease fears? 

The key focus of the week will be the US CPI inflation figures. Investors will be keen to see whether the fears of rising inflation and potentially sooner and faster interest rate rises are substantiated. These concerns have caused the massive selloff and swings that we have seen last week so any signs of higher inflation not materialising, ie a softer reading, could give the market cause to rebound, over the coming weeks and bring volatility levels back down into what is considered a normal range. On the other hand, even a slight surprise on the upside could have a large impact on the market.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024