• European stocks close lower
• ECB Fails to Expand QE
• Weak economic data across Europe and US
European indices finished today’s session in red, after the ECB kept interest rates and most of its monetary policy unchanged, while investors were counting on expansion of the central bank's bond-buying program which would include junk-rated bonds as many European countries might by downgraded by rating agencies. Also GDP figures from the euro zone largest economies came well below expectations. Recent data showed the French and Italian economies entered a recession. Market sentiment worsened after surge in German unemployment numbers. DAX 30 dropped 2.2%, CAC declined 2.1% and FTSE 100 finished 3.0% lower.
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Create account Try a demo Download mobile app Download mobile appUS stocks followed their European counterparts after recent data showed a record fall in US consumer spending during March as well as another sharp increase in jobless claims last week. Gilead Science's reported positive partial data from a trial antiviral remdesivir to treat patients with Covid-19, however these news were not able to sustain positive sentiment. During today’s session Dow Jones dropped 1.27 %, S&P 500 fell 1.05 % and Nasdaq is trading 0.52 % lower. Spot gold dropped 0.5% to trade around $1,703 /oz, but was on track for its best month since 2016.
Analysts have warned of another selloff as economic data underlines the extent of the damage already done, with investors also wary of the pace of the recovery from a looming recession.
"In large part this data is seen as something we've already taken for granted," "We know that the economic data, especially as it pertains to labor, is bad and is going to get worse." said Art Hogan, chief market strategist at National Securities in New York.
Tomorrow, the volatility in the markets should be lower as many European countries, as well as China and Turkey, celebrate Labor Day. For this reason, most stock exchanges will be closed. Manufacturing data from US and Canada are main data releases scheduled for tomorrow. On the earnings front, Royal Bank of Scotland (RBS.UK),ExxonMobil Corp (XOM.US), Chevron Corp (CVX.US), Colgate-Palmolive Co (CL.US) will post their quarterly earnings tomorrow.
USD/CHF managed to break below the upward trend line. As long as the price sits below it, the continuation of a downward trend looks more probable. Local support can be found at 0.9585. On the other hand, in case bulls regain control and we see a return to a move higher, then resistance at 0.9774 may come into play. Source: xStation5
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