FTSE +24 points at 7166
DAX +32 points at 11630
CAC +19 points at 4901
Euro Stoxx 50 +13 points at 3321
China made an optimistic start to the year as Caixin’s manufacturing PMI hinted at a speeding expansion in December (51.9 vs. 50.9 expected and printed a month earlier). The economic activity in China is expected to expand at a higher pace moving into the Chinese New Year, which is due earlier this year.
Chinese and Australian stocks lead gains in Asia. ASX 200 rallied 1.19%, as technology stocks (+2.12%), industrials (+1.73%), miners (+1.17%), financials (+1.05%) and energy stocks (+0.92%) all saw solid demand.
Hang Seng (+0.71%) and Shanghai Composite (+0.83%) gained. Japanese stocks benefited from an extra day of holiday.
The US dollar softened across the board. The US dollar index slid 0.13%.
The Aussie (+0.63%) and the Kiwi (+0.66%) were the leading gainers against the greenback as the U.S. 10-Year yields closed 2016 below 2.45%. Oil currencies joined the positive momentum against the US dollar. The USD/CAD traded at 0.7236, the NOK strengthened 0.34%.
The EURUSD (+0.31%) was better bid in Asia. As a quick reminder, the pair had endured a shaky year-end after it got caught into algo orders and accidentally rocketed to 1.0652. The EUR/USD rectified to 1.0449 in Frankfurt on Monday. Light option barriers trail below 1.05 for today’s expiry. A larger put option is waiting to be activated at 1.0450.
Cable traded rangebound above the 200 and 100-hour moving averages (1.2285 and 1.2273 respectively). Softening US dollar suggests a deeper upside correction in pound. The key GBP/USD resistance is seen at 1.2420 (major 38.2% retracement on Dec 12th to Dec 28th decline), before 1.2500 (optionality).
US and European equity futures were nicely in demand. DAX futures (+1.05%) gained the most, while FTSE (+0.64%) and Eurostoxx (+0.55%) futures hint at a positive open in London and in Frankfurt.
FTSE is called 24 points higher at 7166 at the open, after having closed the year at the historical high level of 7142.