Market Commentary | This Week: ECB Rate Decision

European markets ended trade on Friday with significant gains after China reported the first increase in producer prices in almost five years. Meanwhile, the US Dollar reported gains against both the Euro and the British Pound. The FTSE 100 gained 0.51% boosted by Tesco with a 4.41% increase. The DAX rose 1.6%, with its best performer RWE as its shares soared 4.26%. Volkswagen also jumped 2.4% after the company reported a 7.1% rise in sales in September. The CAC 40 also closed 1.49% in the green.

Late on Friday, Goldman Sachs won a $1.2 billion lawsuit against the Libyan investment authority, an oil wealth fund set up under Gaddafi’s authority, over a series of complex trades that occurred just before the 2008-banking crisis. The court ruled that the bank did not have “undue influence” on the fund when it pushed for derivative trades, nor there was evidence of excessive profits. Goldman Sachs shares were up around 1.7%.

Crude oil prices decreased under $52 per barrel ahead of the oil rig count report by Baker Hughes. The US oil inventories increased by 4.9 million barrels while the country’s crude distillates stocks declined by 3.7 million barrels

This week

The focus of the week will be Thursday when the ECB announces its interest Rate Decision. Although the rate is not expected to change and neither any policy amendments, Mario Draghi may leave the door open neither to more easing for the end of the year or even further in 2017, after the earlier talk of tapering.

US earnings season will be in focus this week, as a large number of companies from across all the equity market announce their revenue figures. Technology firms, consumer firms, oil companies and banks all feature in the equation, which with their figures will provide plenty of direction for the market. UK companies also set up their reporting, with both ends of the consumer spectrum represented, in the form of luxury brand Burberry and essential household goods firm Reckitt Benckiser on the calendar.

On the economic front, UK data is at the Centre stage, with CPI, jobs numbers and retail sales on tap. Also in the calendar is China data, which will drive plenty of volatility for Asian indices. The debate over the US economy continues, with CPI figures and home sales on the calendar. We also get the third presidential debate, although this is unlikely to have too much impact on markets, which remain comfortable with the idea that Hillary Clinton will win out in the end. 

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investments Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.