Alpari UK
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US Opening Call from Alpari UK on 26 April 2013
Europe lower ahead of US GDP release
Today’s US opening call provides an update on:
* European stocks lower as traders take profits ahead of US GDP figure;
* Expectations high ahead of GDP release, potentially setting ourselves up for disappointment;
* Earnings take a back seat to data on Friday with the number of companies reporting massively reduced.
It’s been quite a slow start to the European session, with a lack of economic and earnings releases providing little direction for the markets.
Instead we’re seeing some profit taking in Europe, following a relatively positive week for equities. Stocks have rallied this week on expectations that the ECB is going to cut interest rates and the next meeting on Thursday by a minimum of 25 basis points.
There’s also an element of caution in the markets, ahead of the release of the first quarter GDP figure in the US. The markets have priced in annualised growth of 3% in the first quarter of the year, but this may turn out to be a little optimistic given some of the disappointing data seen towards the end of the quarter.
The danger we have is that the strong start to the year in the US may have led to overly optimistic forecasts which means people are essentially setting themselves up for disappointment. That’s not to say this figure won’t meet expectations, but we need to take a closer look at the data before we get carried away.
There are some more companies reporting fourth quarter earnings today, although the number is far less than we’ve seen earlier in the week. This means they may not have quite as strong an impact on the markets, with investors instead focusing more on the GDP figure out of the US.
Ahead of the open we expect to see...
Europe lower ahead of US GDP release
Today’s US opening call provides an update on:
* European stocks lower as traders take profits ahead of US GDP figure;
* Expectations high ahead of GDP release, potentially setting ourselves up for disappointment;
* Earnings take a back seat to data on Friday with the number of companies reporting massively reduced.
It’s been quite a slow start to the European session, with a lack of economic and earnings releases providing little direction for the markets.
Instead we’re seeing some profit taking in Europe, following a relatively positive week for equities. Stocks have rallied this week on expectations that the ECB is going to cut interest rates and the next meeting on Thursday by a minimum of 25 basis points.
There’s also an element of caution in the markets, ahead of the release of the first quarter GDP figure in the US. The markets have priced in annualised growth of 3% in the first quarter of the year, but this may turn out to be a little optimistic given some of the disappointing data seen towards the end of the quarter.
The danger we have is that the strong start to the year in the US may have led to overly optimistic forecasts which means people are essentially setting themselves up for disappointment. That’s not to say this figure won’t meet expectations, but we need to take a closer look at the data before we get carried away.
There are some more companies reporting fourth quarter earnings today, although the number is far less than we’ve seen earlier in the week. This means they may not have quite as strong an impact on the markets, with investors instead focusing more on the GDP figure out of the US.
Ahead of the open we expect to see...
Read the full report at Alpari News Room