HSBC nearly 2% higher
In London, the mining sector is keeping the markets in positive territory, which is a nice change. Natural resource stocks have been hit hard recently, so impressive trade figures from China last night provided the perfect opportunity to pick up cheap mining stocks. Asian-focused bank HSBC is nearly 2% higher, as although the Hong Kong protests continue they have fallen off the front page of the newspapers.
Today’s rally is quickly giving back its gains; the US traders are back to full swing tomorrow we will have a true reflection of what the market is.
Trading light over Columbus Day
In the US many American’s are celebrating Columbus Day, and although the equity market is open trading volumes are light. The Dow Jones is therefore down 62 points at 16,481.
While aluminium giant Alcoa kicked off US reporting season last week, Wall Street titans JPMorgan, Wells Fargo and Citigroup report tomorrow. The finance houses will be in focus as the Federal Reserve is subtly moving towards increasing the interest rate.
Gold gaining ground
Copper has managed to squeezed out small gains after China posted a jump in imports and exports. The red metal has spent most of the past three months in the red due to demand concerns, and 300 cents per pound is providing support for the time being. If Chinese inflation slips during the week that level could be taken out.
Brent oil is still taking a beating, as OPEC nations like Kuwait are unlikely to cut production; Saudi Arabia has basically given the nod to the markets that they would be content will oil dropping further.
Gold is still gaining ground as the uncertainty over the Ebola crisis still lingers in the background.
Greenback surge slows
The euro and the pound are higher versus the US dollar today as the surge in the greenback comes to an end. Last week the US dollar index closed lower after a winning streak of 12 weeks, which was the longest string of weekly gains in over 40 years.
The euro is on tenterhooks as traders await the German ZEW report tomorrow; even though expectations are low there is some anticipation that figures may miss estimates. The pound is in play as the CPI report on Tuesday will tell us if the pressure is on the Bank of England or not. Excessive slack in the economy suggests that Mark Carney will not be in a hurry to raise rates.