Spreadex Market Update
Draghi and co prepare to address the baying masses
It was a relatively flat open for the Eurozone indices, as they displayed the jitters of a bride on her wedding day with intermingled feelings of excitement and doubt. The rumours that began yesterday, of €50 billion a month QE, is still analysts’ favourite prediction for the moment, with multiple sources ‘confirming’ the plan. What remains to be seen is whether this, or any other plan, is going to satisfy the highly expectant markets. In what appears to be the calm before the storm, the euro managed to put distance between it and its 1.15 price against the dollar; however, if history is anything to go by, this respite may not last long if and when the ECB announces its plans.
Gold has begun to retrace its steps away from the $1300 per ounce mark it was encroaching on yesterday as the cacophony of QE noise obscures the facts. Yet the precious metal still has a chance for posting gains later today, depending on the market reaction to any QE announcement, and more importantly, how the euro is affected.
After being so sensitive to movements in the commodity sector in the past few months, the FTSE has gained some resilience of late, and is currently approaching the levels it had reached at the start of December. With Brent Crude still circling the upper levels of $48 per barrel, in what has been a rare display of (relative) stability for the commodity, the FTSE has been allowed to focus on the positive and finally begin its 2015 in earnest.
Finally, the US markets appear to be ready to shed their slump after closing higher last night. However, with the focus on Europe, and another set of unemployment claims to deal with this afternoon, it is too soon to tell whether the Dow Jones and its colleagues will be able to continue the run of form they saw yesterday.
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