Economic confidence the outlook for the day after positive outlook from Japan

He left it late this year, but Santa finally provided a Christmas rally yesterday, after stability entered the previously volatile rouble and Brent Crude oil, and positivity from US and Japan led to worldwide rallies.

Whilst Brent Crude closed, and opened, just below the $60 per barrel mark, slipping from its $63 high of yesterday, the fact that oil has maintained this support level for much of the week is inspiring confidence in the markets.

This stability has also lent itself to the Russian rouble following President Putin’s calming words yesterday morning. Whilst, like oil, the rouble is not out of the woods yet, the relative calm compared to the volatility the currency suffered earlier this week is allowing many of the global indices to continue their rallying cries from Thursday afternoon.

Despite slipping into recession earlier last month, Governor Kuroda of the Bank of Japan announced an upbeat outlook for the Japanese economy, going some ways to instil confidence in the Japanese economy. Unsurprisingly, the Nikkei grew by nearly 150 points in its trading hours, to close at 17782.5, after it had already been boosted by the week’s positive news from the US Fed.

If the thought of the Dow Jones not reaching 18000 was laughable a few weeks ago, then the thought of it hitting that peak this week was equally dubious following a dismal run of losses for the US index. Yet a bit of Christmas magic, following the display of faith by the US Fed, the stabilising rouble and Brent Crude, and the Swiss slash in interest rates has led to the Dow nearing its record highs of November and early December. After closing at 17778, and futures hitting 17899 at one point, another rally this afternoon could see the US index pushing its 2014 resistance level.

Where the US goes, Europe normally follows, and the strong finish to Thursday from the Dow et al., also saw the best one day gains for Europe in three years. Boosted by a strengthening US, alongside the situation in Switzerland, the DAX opened at 9913.2, once more nearing the 10000 mark it had reached earlier in the month. Similarly, following the bullish sentiment arising worldwide, the FTSE saw Black Friday-boosted retail sales lead the UK index to open at 6510.5, its strongest open in a week.

With a lack of major announcements as the markets ready themselves for Christmas, it remains to be seen whether positivity can beget more positivity, or a spanner will be thrown in the works by the usual suspects, the rouble and Brent Crude, whose stability, whilst pleasing, is ever uncertain.