Euro weakness fuels buying in Europe
Equity markets certainly have that Friday feeling and as Greece works on its proposals for its creditors, traders climb aboard the bull-run bandwagon. The weakness in the euro is fuelling the spate of buying in Europe and that feel good factor is overflowing into the UK market.
British homebuilders are in demand after a number of the companies were upgraded by a US investment bank, and since interest rates in the UK are not about to rise anytime soon, dealers are not deterred about buying into a sector that is already at multi-year highs.
Dow up to 18,015
In the US, the Dow Jones is trading at 18,015, up 55 points, and nearly 14 of those points come from General Electric, after the company spun off nearly its entire property empire for over $26 billion. The move is aimed at getting back to its industrial roots, and shareholders cheered the share buyback scheme that went with it.
The rally in the US market is being led by the heavy industry stocks, while US banks are ever so slightly in positive territory ahead of first-quarter results next week.
Gold above $1200
Copper jolted higher today as better-than-expected CPI and PPI figures out of China propelled the metal higher. Even though the consumer and producer figures from China were nothing special, it just goes to show that the stimulus packages from Beijing are slowly trickling down.
Gold is enjoying time its time in the sun as short covering has pushed the metal above the $1200 mark, but the rally won’t last long as strong equity markets and even the strong dollar will catch up with the precious metal.
Dollar rally gets second wind
The almighty dollar has retaken the crown of the currency markets and the greenback is advancing against the euro and the pound. The dollar rally is getting its second wind on the back of the division that exists within the Federal Reserve. The market is looking at the possibility of a rate rise from the US between June and September, and this time the momentum behind the greenback will be difficult to derail.