Germany smashes GDP estimates, Brent crosses $60

Instead of Greek hearsay, the Eurozone had some actual numbers to deal with as GDP for the region was announced.

After the DAX closed at an all-time high inspired by the Russia/Ukraine ceasefire agreement, the Eurozone indices continued their rally after strong GDP data. Whilst France only grew 0.4% for the year, Germany exploded expectations by posting 0.7% gains in the fourth quarter, leading to 1.6% growth for 2014. If Italy’s GDP follows the same trend as Germany then the 0.2% forecast for the region as a whole may end up looking like a significant underestimation.

Whilst the Eurozone was for once allowed to focus on news that wasn’t related to Athens, the EU summit last night provided little in the way of progress on the issue, to no-one’s surprise whatsoever. Despite the looming Monday dead line, there is still the lingering feeling that neither side will comprise, with Angela Merkel reiterating that she thinks the best course for Europe is to follow the rules already set. However, with a wave of legitimately good news for the Eurozone, market focus on the Greek issue will likely be kicked to Monday so this swell of bullish trading can continue.

The FTSE received its own good news yesterday, with Mark Carney’s pro-interest rate hike comments joining the wave of Eurozone relief for a strong close. This positivity continued into this morning, as a strengthened Europe buoys the UK’s interests in the continent. However, more important is the FTSE’s intertwined relationship with commodities; with both oil and copper having impressive Thursday’s, the notoriously volatile mining and energy sectors are once again in the green.

Brent Crude reached $59 per barrel last night, and this morning crept over the $60 mark that was once seen as the lowest oil could go; the return to this psychologically significant level, the first time in 2015, is another reassuring sign from the commodity. This meant that Premier Oil and Tullow Oil, stocks that suffered severe knocks at the start of the week, edged back into the green. Similarly, copper closed above $260 per pound for the first time in over four weeks, dragging with it Vedanta and Antofagasta. The dual push from these commodities, alongside a clearing of clouds over Europe, looks set to give the FTSE a better close to the week than it could have hoped for, even as late as Wednesday.