European shares quickly bounced back up after opening lower on Thursday, as market sentiment was shaken overnight by hawkish monetary hints in Japan.
Some investors have been caught by surprise after BoJ Governor Kazuo Ueda hinted towards the end of the negative rates era in Japan, where the sparks of a more hawkish approach had a ripple effect across a wide range of assets like JPY pairs, of course, but also treasury and equity markets.
This volatile price action will likely be a very short-term turbulence for EU stock traders as the market quickly defended support zones established recently as the STOXX-50 index remains above the 4,460.0pts mark.
Of course, there is still room for a more significant correction towards 4,445.0pts or even lower around 4,430.0pts, without threatening the mid-term bullish trend, but there is a high chance trader focus will switch back to the macro developments.
Indeed, on top of today’s EU GDP data, US employment figures loom tomorrow, while bets of a more dovish approach from the Fed and the ECB stay well on the table before next week’s FOMC and ECB’s rate decisions.
We expect the market to remain volatile without a clear direction before this news.
Pierre Veyret – Technical analyst, ActivTrades
Some investors have been caught by surprise after BoJ Governor Kazuo Ueda hinted towards the end of the negative rates era in Japan, where the sparks of a more hawkish approach had a ripple effect across a wide range of assets like JPY pairs, of course, but also treasury and equity markets.
This volatile price action will likely be a very short-term turbulence for EU stock traders as the market quickly defended support zones established recently as the STOXX-50 index remains above the 4,460.0pts mark.
Of course, there is still room for a more significant correction towards 4,445.0pts or even lower around 4,430.0pts, without threatening the mid-term bullish trend, but there is a high chance trader focus will switch back to the macro developments.
Indeed, on top of today’s EU GDP data, US employment figures loom tomorrow, while bets of a more dovish approach from the Fed and the ECB stay well on the table before next week’s FOMC and ECB’s rate decisions.
We expect the market to remain volatile without a clear direction before this news.
Pierre Veyret – Technical analyst, ActivTrades
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