Spreadex Market Update
European stocks inch higher
European stocks inch higher on Friday as investors increase demand for risk following the decision the Federal Reserve gave on Wednesday to soften US monetary policy. Gains in the FTSE remained under pressure as market makers offload their hedges following the expiry of December options. Standard & Poor cut its long-term rating of the European Union by one notch to AA+ on concerns about how the bloc’s budget was financed.
UK consumer confidence unexpectedly fell for a third month in December as the British outlook on the economy worsened. The index has now fallen for three months in a row as utility prices increase and inflation outpaced wage growth, squeezing household incomes and hitting sales in British shops. Despite the worse than expected reading, the UK managed to keep its top rating at Standard & Poor after they said the country’s debt will peak sooner and lower than it had originally forecasted.
Brent crude headed for a weekly increase after the Fed reduced stimulus, indicating the economic recovery is gaining strength and will support fuel consumption. Gold continued to decline, surpassing its lowest close in more than three years as investors dumped the precious metal in exchange for riskier stocks.
Figures just in from the US showed that final GDP increased by 4.1%, 0.5% higher than economist expected. The better than expected increase comes after consumers stepped up spending on services such as health care and as companies invested more in software.
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