Economic Data Helps Stocks, EUR/JPY At An Interesting Point
It all came down to economic data yesterday as better than expected results helped to spark a major equity rally. The U.S stock market bounced higher at the start of the session as better than expected data from Europe and Canada, encouraged investors to get back into riskier assets.
Europe took the stage first, during morning hours, releasing its services PMI. Germany showed an improving Services and Manufacturing PMI, coming out at 51.5 and 52.0, respectively. France also showed an impressive figure, releasing a 60.40 result, compared to expectations of 51.70. Even though Europe’s manufacturing PMI came out just below analysts’ forecast, it wasn’t enough to bring down the equity market. The DAX closed the session with a 2.44% gain, while the FTSE finished with a profit of 1.98%.
Throughout the session Canada also helped to back improving sentiment showing that their retail sales had increased by 1%, beating expectations of a 0.5% increase. According to Reuters, the auto sector contributed the most to the gains in September, climbing 1% thanks in part to a 2 percent jump in used and recreational vehicles and parts.
As mentioned above, the U.S stock market jumped at the start of the session, backed by an improving global economy. Throughout the session, U.S existing home sales shocked investors for the better, soaring by 6.1M, compared to analysts forecast of 5.7M. Even though a part of the massive increase was due to low house prices, the better than expected result, helped stocks hold onto their gains throughout the session. The S&P500 finished the session with a 1.36% gain, while the Nasdaq increased by 1.4%.
From a technical point of view the S&P500 is still showing bullish signs, but it is fighting for its prior high. One can see on the chart below that the S&P500 finished the session with gains, but failed to break its peak around 1110.
http://dodjit.com/CmsItems/image/Dai...25-34%20AM.png
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