Spreadex Market Analysis: Range-Bound Trading In Euro Indices

AM Analysis – “European markets opened slightly positively today” – Shavaz Dhalla
European markets opened slightly positively today as investors decided to start the week in a profit-taking mood. It seems investors are now putting the concerns over the US budget behind them and are instead looking forward to a break from talks of a government shutdown. Furthermore, since this matter has been put to bed for now, traders will be hoping that volumes will slowly return to normality as many have argued that the thin volumes as of late have largely been attributed to uncertainties in the US.

However, despite the current near all-time highs of equity markets it could be argued that the valuations are unrealistic. There is the argument that as money is relatively cheap at the moment, the surge in the valuation of equities has occurred because of this, instead of the strength of global economic fundamentals. If one considers that the world is still being troubled with the economic calamity in the Eurozone as well as the fact that the US debt problems still need to be resolved in the long-term, then one could argue that it may simply be a matter of time before traders observe a sharp downside correction in equities.

PM Analysis – “Euro headline indices have traded fairly range-bound this morning” – Max Cohen
European headline indices have traded fairly range-bound during this morning’s session and U.S futures are little changed whilst market participants await fresh direction, possibly in the form of tomorrows delayed non-farm employment data. Moved from the original October 4th date owing to the partial government shutdown, the data tomorrow will probably show employers added 180,000 workers in September, the most since April.

The S&P 500 is trading at record highs after advancing 3.7 percent this month on the back of the congressional agreement on a new federal budget, but with that out of the way, the tapering of the Fed’s $85 billion of monthly bond purchase will be thrust back into the spotlight. Fed Chairman Ben Bernanke’s refusal to reduce the government’s monthly bond purchases has seen the S&P 500 climb some 22 percent this year.

Shares in G4S have led the FTSE 100 higher with the security services company climbing 3.39 percent amid a potential 1 billion pound offer from Charterhouse for G4S’s cash solutions business. The FTSE is now trading higher for the eighth straight session with investors demand supported by expectations the Federal Reserve will keep its stimulus in place for the time being following the U.S fiscal standoff.

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

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