Calm bond markets see eurozone jitters cease

Heading into the close the FTSE 100 is up 95 points at 6290 as fears over the eurozone ease for now.

Janet Yellen
Source: Bloomberg

Eurozone fears ease

In London equities are finishing the week on a positive note as Greek bond yields retreat. The fear has evaporated out of the eurozone today as bond markets have calmed down but I wouldn’t get too comfortable as next week is likely to be a rocky ride.

The eurozone debt crisis has a history of rearing its ugly head, Ebola has yet to be contained, China’s GDP report will tell us the golden days of Chinese growth are over. Confidence in equity markets takes months to be gained but it is lost in hours. 

General Electric's direction pleases traders

In the US the Dow Jones is up 245 points at 16,362. Strong consumer confidence, combined with robust results from blue-chip stocks, is fuelling the rally. Bank of New York Mellon and Morgan Stanley proved that Wall Street banks rule the roost, while General Electric’s earnings per share marginally missed estimates but the change of strategy away from finance and more concentration on the industrial side of the business pleased traders. 

Gold in downward trend

High grade Copper is hovering above the 300 cents per pound level. The Hong Kong protests may have faded from the headlines but China is still in focus as the third-quarter figures are out next week. Soft GDP numbers could be the final straw for the red metal.

Gold has slumped back into the downward trend — traders are less fearful about Greek debt so gold has lost is edge. Meanwhile, oil has recouped some of this week’s losses. The energy is firmly in oversold territory but the fundamentals don’t show a major correction any time soon. 

Yellen focuses on wealth inequality

Traders were looking to Janet Yellen for a clue as to when interest rates will be on the move but Ms Yellen dedicated much of her speech to wealth inequality. The only wealth inequality traders are interested in is the widening gap between the US and the eurozone.

The University of Michigan consumer sentiment jumped to a seven-year high, which gave the traders ammunition to go long on the greenback again. The jump in consumer confidence was taken as a sign that quantitative easing is soon coming to end. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.