Markets feel Christmas cheer after oil rallies(ish) and Swiss slash interest rates

Rejoice! The Christmas bump finally seems to have arrived, as a wave of bullish news last night and this morning led to the first unequivocally positive day for the global markets in weeks.

First things first, Brent Crude oil, the primary cause of the rouble collapse, and the thorn in the side for many of the indices recently, continued its rally from yesterday, even reaching $63 per barrel at points during the day. Whilst in the grand scheme of things this price is still dismal for the commodity, and oil has indeed slipped from this high as the day went on, the markets grabbed whatever whiff of bullish sentiment they could today and ran with it.

After seeing unemployment claims better than expected at 289k, compared to 297k forecast, the Dow Jones managed to rocket to 17530.5 immediately after the bell, opening at 17349.5. The Philly Fed Manufacturing Index came in lowered than forecast, but following last month’s recent record this was to be expected. The effects of the positivity injected into the US markets by the US Fed last night was still being felt today, allowing the US markets to continue on its home-grown upward trend whilst simultaneously being boosted by the (relatively) rallying Brent Crude oil and a robust day from the European indices.

The FTSE finally had a consistent period of growth after being buoyed by the Swiss Central Bank’s interest rates slash and, more importantly for the energy-heavy index, the new-found stability of oil. The cherry on top for the FTSE was the announcement of its biggest retail boom in a decade, with a 1.6% growth in retail sales prompted by the British adoption of Black Friday.

There was something in the air today; the DAX had a tremendous day, growing nearly 2.3% to hit an almost sustained high of 9790. With a mediocre German Ifo business climate score, the weak rouble and election indecisiveness in Greece, you would have been forgiven for assuming the German index would struggle this Thursday. Yet with the SNB slashing Swiss interest rates in order to protect its currency cap, the Eurozone indices seemingly took this as an indicator of impending ECB quantitative easing, leading to an area-wide rally that would have been unthinkable at the start of this week.

Finally, after Vladimir Putin addressed his nation this morning, the Russian President managed to inspire some stability into the rouble, which managed to trade at 60 roubles per dollar for much of the day. Whilst 60 is still an uncomfortable figure for Russia, the currency did dip below this figure a few times over the day, suggesting that the worst may be over this side of the New Year. This fact will depend on the swiftness, and harshness, of the USA’s latest sanctions.