European shares registered moderate gains at the beginning of this new year amid increased risk appetite from investors. Vaccine deployments, central bank aid as well as stimulus measures from governments keep on sustaining market sentiment and are likely to remain as major market drivers for Q1. However, bullish performances have also been registered on more “defensive” values like precious metals illustrating that bullish investors are diversifying their portfolio and spreading their risk across different asset classes. This hedging strategy may be a sign of lingering uncertainties about the still fragile economic recovery being threatened by the new strain of the virus. This could lead to a bumpy Q1 if any problems with the vaccines emerge in the coming weeks.
In the meantime, traders brace for a busy first week of 2021 with today’s focus on the highly anticipated OPEC+ meeting during which energy ministers will decide on oil production. Investors will also be keeping an eye on the FOMC minutes on Wednesday as well as the US unemployment figures for December on Friday.
