European Stocks Rose Despite on Debt Troubles in Europe…
European shares hit their highest closing level in nearly for last six weeks on Friday, with nuclear crisis in Japan and intensity growth in the Middle East. The quantitative easing (QE2) continues to support the world markets. Stock markets worldwide have benefitted from monetary stimulus. But markets may lose momentum in the run-up to the end of the Federal Reserve's second round of quantitative easing in June.
Financial stocks mostly have appeared under pressure. The Bank index DJ EURO STOXX BANK was closed at level 180.09, falling 0.47 percent. The Deutsche Bank shares have fallen on 0.47 percent, BNP Paribas on 0.56 percent, Commerzbank on 1.37 percent and Banco Santander on 0.93 percent.
The main European indexes rose. FTSE 100 gained 0.34 percent, to close at 5,900.76, DAX 30 rose 0.18 percent, to close at 6,946.36, CAC 40 added 3.54 points, or 0.09 percent, to close at 3,972.38. Futures DJ STOXX 50 before opening of the Europe at level 2,830.00 (-0.17 %). The European stock markets will open weak decrease.
The FTSEurofirst 300 index of top shares rose 0.1 percent at level 1124.65. Last week, the index added 3.4 percent, the biggest gain since September.
Before opening of the European stocks market U.S. 10-year T-Note at level 3.44% (+0.035), 10-year German Government Bonds at level 3.28% (+0.035%), and 10-year U.K. Government Bonds at level 3.61% (+0.031).
Oil prices were seen taking a breather on Friday following the previous session's strong gains, with a military campaign continued against Libya and news that Syrian troops fired on protesters.
U.S. WTI crude (WTI) $105.16 (-0.23%) a barrel, while London Brent crude (BRN) $115.46 (-0.11) a barrel.
Spot gold was last at $1,426.19 an ounce, down slightly from Friday. It is now traded at level $1426.10 (-0.11) an ounce.
In the Forex the dollar grows up. The euro has appeared under pressure after German Chancellor Angela Merkel's conservatives were routed in elections in a key state. But as a whole pair EURUSD is above level 1.4000 because of expectation of elevating of interest rates ECB in April. The Forex slipped as problems in the Middle East and Japan's nuclear crisis left investors with little appetite for riskier assets.
US Dollar Index grows and is at level 76.61 (+0.16%).
Our forecast:
For euro this week the data on inflation (CPI) will be important. If this data grows, it will convince investors, that ECB will increase the interest rate in April. We think that the euro remains under pressure.
On Events Next Week:
MONDAY: Personal income and spending, pending home sales, two-year Treasury note auction; Lockhart speaks, Evans speaks.
TUESDAY: S&P Case-Shiller home price index, consumer confidence, five-year Treasury note auction, FDIC meeting on mortgage rules; Earnings from Lennar before-the-bell; Bullard speaks. WEDNESDAY: Mortgage applications, Challenger job-cut report, ADP employment report, oil inventories, seven-year Tresaury note auction, farm prices, Wal-Mart international investor conference; Earnings from Family Dollar before-the-bell and Mosaic after-the-bell; Bullard and Hoenig speak.
THURSDAY: Weekly jobless claims, Chicago PMI, factory orders, money supply; Lacker speaks, Tarullo speaks.
FRIDAY: Auto sales, nonfarm payroll report, ISM manufacturing index, construction spending; Plosser speaks.
By Sergey Kostenko, chief of analysis department Grand Capital
