Spreadex Market Analysis: Euro Markets Erase Early Losses

AM Analysis – “Asian stocks rise for a third consecutive session” – Max Cohen
Asian stocks have risen for a third consecutive session after Chinese leaders pledged to allow more private investment in state-controlled industries and expand farmers’ land rights post the Communist Party plenum meeting. The initial reaction to the Chinese political reforms was a negative one but as we’re getting more detail, it looks like this is a revolutionary change.

Current Fed vice chairman Janet Yellen made clear in her confirmation hearing before the senate banking committee last week that it’s important policy makers don’t cut support for the U.S. economy too soon given the limited range of tools available to the central bank. Yellen’s dovish comments have gone some way in supporting the current strength seen in U.S equities, preventing any sell-offs before the traditionally strong Christmas period.

The Federal Open Market Committee will probably wait to taper its bond buying to $70 billion at its March 18-19 meeting, from the current pace of $85 billion a month. The S&P 500 has now traded higher for 6 consecutive weeks, highlighting the positive effect that Yellen’s accommodative stance is having.

PM Analysis – “Euro markets erase early losses” – Lee Mumford
European markets erase early losses and head towards a positive start to the week as investors take positions ahead of what could be a busy week. All eyes will be on the FOMC meeting minutes and a speech by Federal Reserve chairman Ben Bernanke on Wednesday as investors try guess when the Fed will taper their bond buying program. Comments from US Federal Reserve chairwomen-in-waiting Janet Yellen suggested the Fed would not taper anytime soon with many believing March 2014 would be a likely candidate.

Signs of an ambitious economic reform in China also added to positivity helping Asian stocks extend a two-week high. China vowed to carry out the broadest expansion of economic freedoms since as least the 1990’s including the relaxation of Chinas one-child policy.

Gold futures was in decline on Monday, struggling from its range-bound finish in the prior session as traders continue to mull when the Federal Reserve will start tapering its bond buying program.

[The original articles by Spreadex can be found here.]

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