Shares climbed significantly higher shortly after the opening bell in Europe this morning, following a positive session across Asia. Market sentiment has been boosted by very strong economic data (GDP, retail sales and industrial output) out of China overnight which beat all estimates, and investors welcomed signs that the economy is stabilizing. Despite this morning’s positive tone, traders still face a very busy week.
The corporate earnings season, which allows investors to gauge the health of the economy, will officially start with Citigroup’s results due today. Traders will also keep a close eye on more economic data this week, with the German ZEW sentiment and the US retail sales out tomorrow as well as several speeches from FED members, including Jerome Powell.
Taking all of this into account, we expect market volatility to be on the rise throughout the week but do not expect European stocks to be significantly directional ahead of next week’s ECB meeting. The Stoxx-50 index continues its slow move towards 3,500.0pts while the DAX-30 jumped 100-points higher at 3,440.0pts, boosted by the solid Chinese data.
In London, the FTSE-100 registered very volatile moves as the British benchmark remains under pressure due to the current lack of leadership as Tory party members continue to vote for their new party leader and next Prime Minister.
